Annual and
sustainability report
2022
Bank of Åland Plc
Going our own way
Bank of Åland Plc
Annual and sustainability report
Financial calendar
The Bank of Åland will publish the following Interim Reports
during the financial year:
• January–March Interim Report April ,
• January–June Half-Year Financial Report July ,
• January–September Interim Report October ,
The Annual Report and all Interim Reports will be published
on the Bank’s website: www.alandsbanken.fi
They can be ordered from: info@alandsbanken.fi or from
Secretariat, Bank of Åland Plc, PB , AX- Mariehamn,
Åland, Finland.
The Head Oce of the Bank of Åland is in Mariehamn,
capital of the autonomous Finnish province of Åland.
Located in the Baltic Sea midway between Sweden and
Finland, the ,-island Åland archipelago has more than
, inhabitants. Its ocial language is Swedish.
This translation of the Swedish-language Annual Report uses
the international currency codes for the European Central
Bank euro (EUR) and the Swedish krona (SEK).
At year-end , the middle rate for EUR was USD .
and SEK ..
“The Bank” refers to the Bank of Åland Plc (Ålandsbanken
Abp), Parent Company of the Bank of Åland Group. Amounts
have generally been rounded o to millions or thousands, but
percentage figures, totals, ratios etc. are calculated on the exact
amounts. The abbreviation M refers to million(s), and K means
thousand(s).
Translation: Victor Kayfetz, Oakland, CA
Cover: Anton Sucksdorf
About the Bank of Åland ..............................
Structure of the Group.................................
The year in brief..................................
Statement by the Managing Director ....................
Daring to go our own way..............................
A healthier sea with the Baltic Sea Project ................
Overall targets and outcomes ..........................
our operations
Private Banking .....................................
Premium Banking ...................................
Partnerships ........................................
Information Technology ..............................
Corporate units .....................................
Table of contents
Sustainability at the Bank of Åland and the year in brief ....
The Bank of Åland’s sustainability strategy ...............
Our global commitments ..............................
Our sustainability management ........................
Our climate strategy .................................
The Bank of Åland’s materiality analysis..................
Our contributions to the UN’s global goals................
Responsible investments .............................
Responsible lending ..................................
Social responsibility ...................................
Environmental responsibility ...........................
Business ethics, anti-crime work and information security .
What the EU’s regulatory framework means to us..........
Governance and management of climate-related risks.....
Report of the Directors ...............................
Facts on Bank of Åland shares .........................
Consolidated financial statements......................
Notes to the consolidated financial statements...........
Parent Company financial statements..................
Notes to the Parent Company financial statements ......
Notes on sustainability at the Bank of Åland ............
Proposed allocation of profit .........................
Auditors’ Report....................................
Five-year Group summary ...........................
Corporate Governance Statement .....................
Board of Directors ..................................
Executive Team.....................................
Definitions ........................................
Stock exchange releases in .....................
Address list .......................................
Bank of Åland Plc
Annual and sustainability report
• The Bank of Åland (Ålandsbanken) was founded in as
Ålands Aktiebank, and we have been listed on the Helsinki
Stock Exchange (now the Nasdaq Helsinki Oy) since .
• The head office is located in Mariehamn, Åland. The Bank has
a total of two offices in Åland and six on the Finnish mainland:
Helsinki, Tampere, Vaasa, Oulu, Turku and Parainen. In Sweden,
the Bank has offices in Stockholm, Gothenburg and Malmö.
• The Group has two subsidiaries: the fund management company
Ålandsbanken Fondbolag Ab and the information technology
(IT) company Crosskey Banking Solutions Ab Ltd.
• In Åland, we are a bank for all residents: both in a position and
with a desire to help develop the Åland of the future.
• On the Finnish mainland and in Sweden, the Bank of Åland has
a niche strategy targeted to entrepreneurs, wealthy families and
individual customers with sound finances. We offer two con-
cepts: Private Banking and Premium Banking.
• Over the years, the Bank of Åland has established itself as an
innovative pioneer in the financial services sector. Our Premium
Banking concept was launched in and has developed into
a model followed by our competitors in the Nordic countries. In
, with the Åland Index, we created an international standard
for measuring the climate impact of private consumption.
• The Bank has business partnerships with various financial tech-
nology (fintech) companies. We also supply services to compa-
nies in the financial services sector. The Bank is also a share-
holder in several of our partner companies.
• The Bank of Åland offers its customers financial products that
benefit them financially, but at the same time contribute to sus-
tainable development. The Baltic Sea Account is a good example.
If we include the total, over the years the Baltic Sea Account
has contributed about EUR . million to projects that improve
and protect the environment.
About the Bank of Åland
Introduction
Bank of Åland Group
EUR M
Income
Net operating profit . . . . .
Profit for the year attributable to shareholders . . . . .
Volume
Lending to the public , , , , ,
Deposits from the public , , , , ,
Actively managed assets
, , , , ,
Managed mortgage loans
,
Equity capital
Risk exposure amount , , , , ,
Financial ratios
Return on equity after taxes (ROE),
. . . . .
Expense/income ratio
. . . . .
Loan loss level,
. . . . .
Gross share of loans in stage ,
. . . . .
Liquidity coverage ratio (LCR),
Loan/Deposit ratio,
Common equity Tier capital ratio,
. . . . .
Tier capital ratio,
. . . . .
Total capital ratio,
. . . . .
Working hours re-calculated to full-time
equivalent positions
Earnings per share, EUR
. . . . .
Equity capital per share, EUR
. . . . .
Dividend per share, EUR .
. . . .
Actively managed assets encompassed managed assets in the Group’s
own mutual funds as well as discretionary and advisory securities volume
plus external funds with contractual earnings.
LCR assets at level and /-day net cash outflow.
Total volume of mortgage loans in Borgo AB that the Bank of Åland manages
through various services.
Profit for the reporting period attributable to shareholders/Average
shareholders’ portion of equity capital.
Expenses/Income.
Net impairment losses on financial assets from lending to the public/
Lending to the public at end of period.
Share of loans in stage /Gross lending to the public.
Lending to the public/Deposits from the public.
Common equity Tier capital/Risk exposure amount.
Tier capital/Risk exposure amount.
Own funds/Risk exposure amount.
Shareholders’ portion of profit for the period/Average number of shares.
Shareholders’ portion of equity capital/Number of shares on closing day.
Proposed by the Board of Directors for approval by the Annual General Meeting.
Bank of Åland Plc
Annual and sustainability report
Associated companies consolidated in the Group: Mäklarhuset Åland Ab, ; Alandia Holding Ab, ; Helen AB Tuulipuistohallinnointiyhtiö Oy; , Uusimo GP Oy,
; Riitamaa-Nurmesneva GP Oy, ; Leilisio GP Oy, .
Crosskey Banking Solutions Ab Ltd
Ålandsbanken Fondbolag Ab
Ålandsbanken Abp
Ålandsbanken Fonder Ab
Ålandsbanken Fonder II Ab
Ålandsbanken Fonder III Ab
Ålandsbanken Fonder IV Ab
Ålandsbanken Fonder V Ab
Ålandsbanken Fonder VI Ab
Ålandsbanken Kiinteistökehitys I GP Oy
Ålandsbanken Kiinteistökehitys
I Syöttörahasto GP Oy
Ålandsbanken Kiinteistökehitys
I Syöttörahasto LP Oy
Ålandsbanken Havsvind I GP Ab
S-Crosskey Ab
Legal group structure
Introduction
Organisational chart
Internal Auditing
Monica Österlund
Board of Directors
Nils Lampi, Chairman
Chief Executive Officer
Peter Wiklöf, Managing Director
Crosskey Banking Solutions Ab Ltd
Niclas Södergård, Managing Director
Åland
Business Area
Mikael Mörn,
Director
Private Banking
Premium Banking
– City oce
– Local branch oces
Corporate Services
Legal Advisory Service
Finnish Mainland
Business Area
Anne-Maria Salonius,
Director
Private Banking
Premium Banking
Helsinki
Tampere
Turku
Parainen
Vaasa
Oulu
Sweden Business
Area
Magnus Johansson,
Director
Private Banking
Premium Banking
Stockholm
Gothenburg
Malmö
CFO
Corporate Unit
Jan-Gunnar Eurell,
Chief Financial Ocer,
Deputy Managing
Group Finance
Treasury
CAO
Corporate Unit
Tove Erikslund,
Chief Administrative
Ocer
Human Resources
Business Development
Customer Service
& Market Support
Business Support
Business Support
Capital Market
CRO
Corporate Unit
Juhana Rauthovi,
Chief Risk &
Compliance Ocer
Risk Control
Compliance
Legal Aairs
Operational Risks
& Security
Credit Scoring
Credit Processes
Ålandsbanken Fondbolag Ab
Carola Nilsson, Managing Director
Partnerships
Business Area
Sofie Holmström,
Manager
Bank of Åland Plc
Annual and sustainability report
The year in brief
Financial summary of
• Net operating profit decreased by per
cent to EUR . M (.).
• Earnings per share decreased by per
cent to EUR . (.).
• Return on equity after tax (ROE)
decreased to . per cent (.).
• Core income in the form of net interest
income, net commission income and IT
income increased by per cent to EUR
. M (.).
• Total expenses increased by per cent to
EUR . M (.).
• Net impairment losses on financial
assets (including recoveries) amounted
to EUR . M (.), equivalent to a loan
loss level of . per cent (.).
• Actively managed assets decreased by
per cent to EUR , M (,).
• Deposits rose by per cent to EUR ,
M (,).
• Lending fell by per cent to EUR ,
M (,).
• Home mortgage loans under manage-
ment increased to EUR , M.
• The common equity Tier capital ratio
decreased to . per cent (.).
• The Board of Directors proposed a divi-
dend of EUR . per share (.), of
which EUR . per share as an ordinary
dividend (.) plus an extra dividend of
EUR . per share (.).
Milestones during
• On January , POP Bank signed a
cooperation agreement with Crosskey on
the renewal of its core banking system.
POP Bank expects to introduce the new
system during .
• On February , the Bank of Åland trans-
ferred most of its Swedish mortgage
loans and related previously issued cov-
ered bonds to the mortgage company
Borgo AB, in which the Bank of Åland’s
ownership stake amounts to . per
cent. The nominal amount of the mort-
gage loan portfolio that was transferred
was SEK . billion. The nominal
amount of the previously issued covered
bonds, which now have Borgo as their
issuer, was SEK . billion. A smaller
mortgage loan portfolio will be trans-
ferred later. The transaction had a non-
recurring positive effect in the Bank of
Åland’s income statement of SEK . M.
At the same time, the transaction will
mean a smaller loan portfolio in the Bank
of Åland’s own balance sheet and thus
a lower current net interest income.
The Bank of Åland will instead receive
distribution fees for brokered loans and
platform income for maintaining various
services to Borgo.
• On March , , the Annual General
Meeting (AGM) approved the distribu-
tion of a dividend of EUR . per share
for the financial year (a regular divi-
dend of EUR . plus an extra dividend
of EUR .).
• The AGM elected Mirel Leino-Haltia as
a new member of the Board of Directors.
Board members Nils Lampi, Christoffer
Taxell, Åsa Ceder, Anders Å Karlsson,
Ulrika Valassi and Anders Wiklöf were
re-elected. At the statutory meeting of
the Board the same day, Nils Lampi was
elected as Chairman and Christoffer
Taxell as Deputy Chairman of the Board.
• The Board of Directors of the Bank of
Åland approved a new share savings pro-
gramme for all Group employees. Employ-
ees can save a maximum of five per cent
of their monthly salary in order to sub-
scribe for twice-yearly targeted issues of
Series B shares. The savings period began
in July . The first share issue was
planned for January , and the pro-
gramme will run for one year. Three years
after each respective share issue, the Bank
of Åland will distribute one free matching
share for each share that has been
acquired in the targeted share issues to
those who have participated in the share
issues and who are still employed by
the Group and own the shares that
were issued.
• Together with its customers, the Bank of
Åland is continuing its commitment to a
cleaner Baltic Sea. This year the Baltic Sea
Project contributed EUR , to vari-
ous projects that promote the health of
the Baltic Sea.
• Standard & Poor’s Global Ratings agency
raised its credit rating of the Bank of
Åland for long-term borrowing to BBB
with a stable outlook, from BBB. At the
same time, the agency confirmed its
credit rating of A-or short-term borrow-
ing. The background to the raised credit
rating was the Bank of Åland’s high prof-
itability, at the same time as it is reducing
its need for capital due to the earlier-initi-
ated and ongoing transfer of its Swedish
mortgage loan business to Borgo.
• For the second year in a row, the Bank of
Åland was named Finland’s best Private
Banking operator in Kantar Prospera’s
Private Banking Finland survey.
0
3
6
9
12
15
20222021202020192018
0
10
20
30
40
50
20222021202020192018
Net operating profit
EUR M
Return on equity after taxes (ROE)
per cent
0
3
6
9
12
15
20222021202020192018
Common equity Tier capital ratio
per cent
Introduction
Bank of Åland Plc
Annual and sustainability report
The year was dominated by changing
global conditions. In February, we saw
Russia invade Ukraine. A full-scale war on
European soil was thus a reality. This event
added to already high inflation figures,
which in some cases reached double digits.
The global situation
One consequence of these high inflation
figures was that central banks completely
pivoted. From being stimulative for a decade
by means of growing balance sheets and low
or negative key interest rates, central banks
now began tightening their monetary policy
via higher key rates and a halt in the growth
of their balance sheets. During the second
half of , the market interest rates most
widely used by our customers climbed from
minus . per cent to almost per cent.
The world’s stock markets reacted very
negatively to the Ukraine war, high inflation
figures and central bank tightening meas-
ures. The Helsinki Stock Exchange fell by
per cent and the Stockholm exchange by
per cent.
The Swedish krona weakened during
the year and was per cent lower at the
end of than a year earlier, compared
to the euro.
During , we saw continued growth in
our business areas. As a result of the home
mortgage collaboration we previously initi-
ated in Sweden with ICA Bank, Ikano Bank
and Söderberg & Partners, in February we
sold and migrated most of the Bank of
Åland’s Swedish mortgage loan portfolio to
our jointly owned mortgage company,
Borgo. This divestment was in keeping with
our original intention with the collaboration.
A mortgage loan portfolio of SEK . billion
was transferred. The divestment generated
nonrecurring income of about EUR mil-
lion. Because of decreased lending in our
balance sheet, the Bank of Åland earned less
net interest income but instead began to
generate distribution fees and platform rev-
enues for our management of Borgo’s cen-
tral functions and information technology.
Statement by the Bank of Åland’s Managing Director:
A successful year, with changing business conditions
Introduction
Peter Wiklöf, Managing Director
Photographer: Viktor Fremling
Bank of Åland Plc
Annual and sustainability report
Our lending grew during by EUR
million if we disregard the transfer of
our Swedish mortgage portfolio. Including
the latter, the negative net change in our
loan portfolio was EUR M.
During the year, we began to report a
new business volume item under the con-
cept of “managed mortgage loans”. This is
the lending volume outside of the Bank of
Åland’s balance sheet that we manage for
Borgo. At the end of , the volume of
managed mortgage loans was EUR , M.
Despite negative developments in the
world’s equity and fixed income markets,
we were pleased by positive net inflows
from our existing and new customers into
our financial investment services during all
four quarters of . Summing up the year,
we recorded a total positive net inflow of
EUR M. However, due to sharp down-
turns in market valuations, our total actively
managed assets decreased by per cent to
EUR , M during the year.
Deposits grew by per cent during the
year, ending at EUR , M.
Increased income
During , our total income increased by
per cent to EUR . M. Especially during
the second half of the year, rising market
interest rates boosted our net interest
income. Net interest income rose by
per cent to EUR . M even though we
had a lower lending volume than in the
previous year.
Because of the downward valuation
trend in the world’s stock markets, we had
less share trading activity and lower actively
managed assets than in . In spite of this,
our net commission income fell by only per
cent to EUR . M.
Our information technology (IT) income
ended up at EUR . M, or per cent lower
than the year before, even though our IT
subsidiary Crosskey managed to win new
customers. The reason was lower project
income than in .
Other income rose by per cent to EUR
. M, thanks to the divestment of our
mortgage portfolio in Sweden and capital
gains in our treasury portfolio.
Also increased expenses
Total expenses rose by per cent during the
year to EUR . M. We continued to invest
in more human resources. Recalculated to
full-time positions, we increased our
employee count by or per cent to .
Staff costs rose by per cent to EUR . M.
Other expenses rose by per cent to
EUR . M. Most of this increase can be
explained by higher expenses for premises,
EUR . M, largely due to the relocation of
our Helsinki office; a lower activation rate for
IT projects, EUR . M; increased travel
costs as COVID- restrictions disappeared,
EUR . M; and increased consultant
expenses, EUR . M.
During the year, our statutory fees rose
by per cent to EUR . M while our depre-
ciation and amortisation fell by per cent to
EUR . M.
Earnings close to the previous
year’s record level
We ended with a net operating profit
of EUR . million, only EUR . million
short of our record earnings of EUR .
million in . Our earnings were equiva-
lent to what we had planned for the year
but arose in a slightly different way than
we had anticipated.
When we planned for , we did not
foresee the stock market declines and the
sharp upturns in interest rates that occurred
during the second half of the year. One
result of these events was that our commis-
sion income was lower than planned, while
our net interest income was higher. This
shows that we have a well-diversified busi-
ness, with several robust income sources to
rely on. In my view, proved the
strength of our business model.
Our know-how was put to the test
We usually describe what the Bank of Åland
does by saying that we deliver a large bank’s
range of services with a small bank’s
thoughtfulness and good sense. During a
year with plenty of drama in financial mar-
kets, powerful inflation and a war going on
not far from our area of operations, our
know-how was put to the test.
Our customers are the ultimate judges of
our know-how and services. It was thus
especially pleasing that for the second year
in a row, we were rated the best Private
Bank in Prospera’s Finnish customer survey.
This survey is divided into categories, and
the Bank of Åland came in at number one in
nine of these categories. According to the
survey, the three categories that customers
value the most knowledge of financial
investments, service-mindedness and per-
sonalised contact were all categories that
we won. This confirms that our customers
appreciate the path we have chosen, which
is based on a long-term approach and
solid relationships.
Our own customer surveys in the Pre-
mium Banking segment also show that our
offering is highly appreciated. In both the
Private and Premium Banking segments,
this is confirmed by the fact that a large
proportion of our new customers initially
contact us because our existing customers
have recommended us.
Last year, our corporate units began for
the first time to deliver services on a broad
basis to an outside company, Borgo.
Together with Crosskey, the Bank of Åland
is providing a turnkey solution including
everything from accounting, treasury,
payments, deposit and mortgage lending
services to regulatory reporting.
For two decades, Crosskey has delivered
IT services to other customers. Today it has
about external customers. During ,
Crosskey continued to add new customers.
The POP Bank Group, which includes local
cooperative banks in Finland, deserves
particular mention. Meanwhile, the trend
is clear: more and more external market
players want to buy services, instead of just
programming code. Collaboration between
the Bank of Åland’s corporate units and
Crosskey will thus be very interesting in
the future.
Sustainability issues a natural
part of our DNA
Since , the Bank of Åland has worked
together with our customers on sustainabil-
ity issues, which shows that we are not
Bank of Åland Plc
Annual and sustainability report
doing this solely because public authorities
are now starting to demand action from all
banks, but on the basis of our own convic-
tions. This is natural for a bank that thinks
long-term and wants to contribute to the
sustainable development goals established
by the United Nations.
During the year, our wind power fund
the first open mutual investment fund in the
Nordic region with this focus – was well
received and saw a good inflow of new capi-
tal. The fund also delivered a return of more
than per cent to its investors. Together
with the Swedish wind power company OX,
we announced plans to establish large-scale
offshore wind farms both south and north
of Åland. If these plans are fully imple-
mented, these wind farms can generate
energy equivalent to three nuclear power
plants of the same size as Finland’s new
Olkiluoto III plant.
However, our sustainability work extends
far beyond individual products. During
, we established our climate strategy.
This means that we are now making proac-
tive choices throughout our operations to
achieve our climate targets and contribute to
the climate goals of Finland and the Paris
Agreement.
We are deepening our knowledge of how
we ourselves and the services we provide
affect our climate. In every area, we are now
setting targets and measuring our impact.
Because of our targets, we need to have a
continuous dialogue with our customers
so that together we can raise our awareness
and move proactively towards a lower
environmental impact.
Looking ahead to the future with
confidence
The Bank of Åland successfully continued to
move forward during . We know that
global events may bring surprises, but the
Bank of Åland has never been stronger than
today as we begin another year. We are
convinced that we can keep growing in a
controlled and profitable manner.
I would like to express my deep gratitude
to all our employees for the admirable way
they have taken on a bigger workload due to
an increasing number of customers and
additional regulatory requirements. Many
thanks also to our existing and new custom-
ers for the trust that you show us.
Peter Wiklöf
Managing Director
Bank of Åland Plc
Annual and sustainability report
Strategy and value creation
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Daring to go our own way
Strategy and value creation
As large banks become ever larger and their customers feel ever smaller, a clear need arises – the need for
a bank where each customer feels seen, heard and appreciated. The Bank of Åland has a century behind it
as an independent, innovative and customer-oriented bank. This is why it is self-evident that we will continue
along a path where the needs of our customers are the guiding principle for the Bank of Åland’s development.
• We offer a wide range of banking and asset management ser-
vices. Under our own brand, we focus on private individuals
and companies in selected geographical areas in Finland
and Sweden.
• We offer Banking as a Service (BaaS). Our target group is compa-
nies that want to offer their customers banking services under
their own brand.
• We offer IT as a Service (ITaaS). Our target group is financial
service companies that need IT services to enable them to deal
with their own customers.
Our vision
Our aim is to be the self-evident bank for individuals with ambitions
and companies that value relationships.
Our position
The Bank of Åland is a bank for investors, with financing know-how.
The Bank of Åland generates value for individuals and companies by
delivering a large bank’s range of services with a smaller bank’s
thoughtfulness and sense of dedication. At the Bank of Åland, we
focus on what problems we solve, what opportunities we create and
how we deliver different types of value to our customers. We always
go our own way, and that is how we persuade more and more
friends to join us on this path.
Our choice of position is ambitious, but it is a position where we
foresee a clear customer need and a growing market. The Bank of
Åland is growing within selected target groups, putting special
emphasis on financial investment operations at the same time as
we deliver financing solutions and other banking services in an
outstanding way.
A bank for investors, with financing know-how
The Bank of Åland’s proficiency as a bank for investors has been
confirmed in all its markets over the past few years. This is demon-
strated by its increasing number of customers, along with various
industry awards. Our financing know-how has long traditions and
will continue to play a central role.
Customer relationships and trust
All sound banking business is based on trust. This is especially evi-
dent in the way that customers handle their financial investments.
We know that it requires time and dedication to build trust among
new customers.
The Bank of Åland offers a bank as it should be – a bank that wants
individuals, companies and the community to have fertile ground for
development. We are convinced that strong, long-term relationships
are built through good performance by ambitious people.
Good service via all channels
The Bank of Åland has always welcomed new technology that
makes everyday life easier for our customers. Our Internet Bank has
thus been a forerunner in the industry since its inception. In our
development work, we draw no distinctions between personal and
digital encounters. Regardless of the channel, our customers shall
always feel that they are receiving good service. Our relationships
shall be equally strong in every channel. But we also take advantage
of the special strengths of the various channels. Personal meetings
are the most suitable channel for advisory services, while our Inter-
net Office – delivered via the Web – and our banking app using
mobile devices enable customers to gain a clear overview and
seamlessly manage their everyday finances.
An ever-broadening range of partnerships
For many years, the Bank of Åland has collaborated with other mar-
ket players within the IT field via its subsidiary Crosskey Banking
Solutions. In the world that is now emerging, we are seeing that the
Bank of Åland has the ability and the potential to offer products and
services to other market players within a substantially broader field
than IT services alone. In fintech, today the Bank of Åland is already
a versatile and capable partner with the capacity to deliver solutions
to companies in most financial service areas.
Making ourselves climate neutral
Given our close connection to the small community of Åland,
located among thousands of islands in the middle of the Baltic Sea,
sustainability work has been a natural element of our core values for
a long time. Together with our customers, we have created products
and services that both increase awareness and support concrete
sustainability projects. Sustainability issues are an integral part of
our usual operational management, where the Board of Directors,
the Executive Team and all our employees have their role.
Our sustainability work begins with a materiality analysis, which
is based on the United Nations sustainable development princi-
ples. We analyse our operations and identify the areas where we
have positive and negative impacts. Then we set clear sustainable
development targets and regularly follow up our work.
Our long-term target is to become a climate-neutral group and
finally achieve net-zero emissions. In we joined the Net-Zero
Banking global alliance, which means that by we shall report
net-zero greenhouse gas emissions, in line with the Paris Agree-
ment. With the help of the Greenhouse Gas Protocol (GHGP), Scope
–, we will calculate and report greenhouse gas emissions on a
quarterly basis from our own operating activities and from the loan
and treasury portfolios in our balance sheet, as well as from our
customers’ financial investment portfolios.
Bank of Åland Plc
Annual and sustainability report
Strategy and value creation
A healthier sea with the Baltic Sea Project
The Baltic Sea Project works for a healthier sea by funding good ideas and raising
awareness of the state of the Baltic Sea. So far, the Bank of Åland has contributed
about EUR . M to important projects.
During we financed, among other things, a project that
explores the potential for using green hydrogen fuel for maritime
transport. A total of EUR , was granted for eleven
different projects.
The largest single grant in went to the Avoin association for
the further development of a map application for sustainable land
use. The aim is to make it easier for landowners to protect the Baltic
Sea and find ways to combat climate change.
The second largest grant in went to PX Solutions, a com-
pany specialising in the production of “green” hydrogen (from
renewable energy sources). Energy production is in a transitional
phase. Emission-free energy will be a key factor in mitigating climate
change. If maritime transport vessels could use emission-free
energy, this would help provide relief for the Baltic Sea.
The projects supported by the Bank of Åland through the Baltic
Sea Project are also being recognised and rewarded by other actors.
PX Solutions and Solar Foods, two companies that have received
funding from the Baltic Sea Project, were selected in September
by the European Commission to participate in its new Euro-
pean value chain for a hydrogen-based economy, which will acceler-
ate the production of clean hydrogen and the development of new
applications for hydrogen. PX is currently doing preparatory work
on a green hydrogen and synthetic methane production facility in
Harjavalta, southeast of Pori, Finland.
Solar Foods produces protein from the air by using carbon diox-
ide and renewable electricity. The company’s demonstration plant,
Factory , is under construction. It will be the first industrial-scale
demonstration plant to employ new technology for the production
of hydrogen, which is used in the process.
The Nordic Council Environment Prize went to the City of
Mariehamn for its Nabben multifunctional wetland, which was also
created with funding from the Baltic Sea Project among other
sources. The projects related to the Nabben wetland have played a
key role in improving water quality around Mariehamn as well as the
Baltic Sea in general.
“We are proud that projects which have been funded by the Baltic
Sea Project receive prestigious awards. This shows that together,
we can influence and improve things,” says Anne-Maria Salonius,
Director of the Bank of Åland’s Finnish Mainland Business Area.
“This is exactly what the Baltic Sea Project is about: ideas that at
their best can grow, inspire new projects, connect with each other
and ultimately contribute to a healthier Baltic Sea.”
Photographer: Mats Westerbom
Bank of Åland Plc
Annual and sustainability report
The Bank of Åland has created its own index, where first and last place ratings in the customer survey correspond to an index value of and , respectively. In order to calculate
the total result, the outcome for each geographic business segment is weighted using total business volume (actively managed assets plus lending and deposits from the public).
To calculate the total result, the outcome for each geographical business segment is weighted using total business volume (actively managed assets plus lending and deposits from
the public).
Maximum outcome .
We will set a target during .
0
3
6
9
12
15
20222021202020192018
Return on equity after taxes (ROE)
per cent
Return on equity after taxes (ROE)
Target
0
3
6
9
12
15
20222021202020192018
0
3
6
9
12
15
20222021202020192018
Common equity Tier capital ratio
per cent
Common equity Tier capital ratio
Target
Target Potential improvement
Above-target outcome
., compared to target
Employee commitment
Outcome Potential improvement
.
Leadership index
0
20
40
60
80
100
20222021202020192018
Dividend payout ratio
per cent
Payout ratio, regular dividend
Payout ratio, extra dividend
Target
Strategy and value creation
Overall targets and outcomes
We have a balanced perspective and
a long-term commitment
The Bank of Åland’s operational management is
based on a balanced perspective where our
customers, employees, shareholders and other
stakeholders are given the opportunity to gen-
erate long-term value. During the year, we con-
tinued our efforts to integrate sustainability
management as a natural element of our work.
Our management by objectives begins with
the Board of Directors, together with the Manag-
ing Director and the Executive Team, formulat-
ing strategic goals and priorities. These are con-
cretised and supplemented with statistics in our
three-year plan, which is updated every autumn.
During , we worked towards the follow-
ing goals:
The Bank of Åland’s objective is to be the best
market player in the Nordic region, with the
most satisfied customers in the Private Banking
and Premium Banking segments.
Every year, the Bank of Åland conducts cus-
tomer satisfaction surveys in the Private Bank-
ing and Premium Banking segments. Our tools
in this work are a Customer Satisfaction Index
(CSI) and a Net Promoter Score (NPS) that
measures customer loyalty. In , the Bank of
Åland was named Finland’s best Private Bank-
ing player for the second year in a row. At the
same time, customers’ willingness to recom-
mend the Bank of Åland remained high.
• The result in the customer satisfaction index,
CSI
: Our goal was , and the outcome
was .
• The result in the Net Promoter Score, NPS
:
Our goal was more than , and the out-
come was .
The Bank of Åland’s objective as an employer
is to have motivated, committed and healthy
employees who are constantly learning.
For the Bank of Åland as a societal stake-
holder and employer, social responsibility is
important. By continuously measuring and
monitoring our employees’ motivation and
working conditions, we can ensure a healthy
and efficient organisation. At the same time,
we consistently work towards equality, while
combating all forms of financial crime
and corruption.
During the year, we continued our leader-
ship development work. In the aftermath of the
coronavirus pandemic, we have created various
dynamic work solutions to ensure that we con-
tinue to be an attractive employer.
• The result of our employee commitment
measurement: Our target was more than ,
and the outcome was ..
• The result of our leadership index: The out-
come was .. We will set a target during
. Notes and sub-targets are presented
in Note S.
The Bank of Åland’s overall and long-term
financial targets are:
• Return on equity after taxes (ROE) shall
exceed per cent over time. The outcome
was . per cent.
Bank of Åland Plc
Annual and sustainability report
0
0.5
1.0
1.5
2.0
2.50
203020282026202420222020
Greenhouse gases, target and outcome
million tonnes of CO
e
Grand total, greenhouse gases
target: reduction compared to
• The common equity Tier capital ratio shall
exceed the FIN-FSA’s minimum requirement
by .–. percentage points. The outcome
was . points above this requirement.
• The dividend payout ratio shall be per
cent of profit for the year, or higher, provided
that capital adequacy does not fall below
target. The Board’s proposal is to distribute
percent of profit for the year as an ordi-
nary dividend.
-
The Bank of Åland’s long-term targets related to
greenhouse gas emissions are:
• Reducing emissions by per cent no later
than , compared to levels.
• Climate neutrality by .
• Net-zero emissions by .
The Bank of Åland’s sustainability work is
based on our materiality analysis, which identi-
fies our largest and most important areas of
climate impact. In , the Board of Directors
adopted a new climate strategy with a number
of targets during the Group’s journey towards
the goal of reaching net-zero emissions by
, in line with the Paris Agreement.
During , we worked to develop models
that will enable us to monitor our progress in
relation to the established goals.
(Notes and sub-targets are presented in
Note S)
Our operations
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Private Banking
Consolidating our position as Finland’s best
Private Banking provider
Photographer: Viktor Fremling
Magnus Johansson, Director of the Sweden Business Area; Mikael Mörn, Director of the Åland Business Area;
and Anne-Maria Salonius, Director of the Finnish Mainland Business Area.
Ålandsbanken Private Banking includes
Private Banking operations in Åland,
on the Finnish mainland and in
Sweden as well as asset management
(Ålandsbanken Fondbolag Ab and
its subsidiaries).
In order to deliver Private Banking service,
we provide a team of employees specialising
in wealth management, financing solutions,
law, personalised service and banking ser-
vices. Our ambition is to help our customers
at all stages of life.
Our Private Banking offering is one of
the cornerstones of the Bank of Åland’s
business operations. Private Banking is
where the Bank has its largest market share
on the Finnish mainland and in Sweden.
During , Private Banking continued
to attract new customers in our three geo-
graphic home markets. The fastest-growing
customer segment is very wealthy customers.
Net operating profit from Private Bank-
ing in amounted to EUR . M,
which was equivalent to per cent of the
Bank’s total operating profit. Return on
allocated equity was . per cent. Due to
declining financial market valuations,
actively managed assets decreased by
per cent to EUR , M, but the net inflow
of actively managed assets remained high
despite the turbulent international situation.
To meet heavy demand and give our
customers the best conceivable service,
new members were added to the team
during .
For the second year in a row, the Bank
of Åland was named Finland’s best Private
Banking market player in Kantar Prospera’s
0
2,000
4,000
6,000
8,000
10,000
20222021202020192018
Actively managed assets
EUR M
Bank of Åland Plc
Annual and sustainability report
Private Banking Finland survey. Our “over-
all performance” and customers’ willing-
ness to recommend the Bank of Åland were
very high, confirming a strong sense of
trust and loyalty among our customers.
The Bank’s own customer surveys show
that customers continue to appreciate us
greatly for our Private Banking solutions,
our personalised service and our sustain-
ability work.
Due to the media visibility of our asset
management experts, awareness of the
Bank of Åland as a wealth manager has
increased significantly. The Baltic Sea
Project has also generated a high media
profile. Together with personal meetings
and relationship-building, the Baltic Sea
Project is a valuable differentiating factor
that make it clear what the Bank of Åland
brand stands for.
Asset management
Ålandsbanken Fondbolag is responsible for
the financial management business of the
Bank of Åland. This includes strategic and
tactical investment decisions in both mutual
funds and discretionary portfolios. To sup-
port the Bank’s asset management services,
Ålandsbanken Fondbolag delivers material
including overall market outlooks reports,
recommendations for individual securities
and asset allocation in the form of model
portfolios.
The year was turbulent. Because
of rising inflation and monetary policy
tightening, both equity and fixed income
markets fell broadly. In addition to rising
inflation, geopolitical tensions and contin-
ued COVID- outbreaks contributed to
reduced risk appetite, especially early in
the year. Despite market turbulence and
a general trend towards outflows from
mutual funds in Finland and in Sweden,
customer interest in the Bank of Åland’s
mutual funds increased. Our customers
paid particular attention to alternative
investments such as Vindkraftsfonden
(the Wind Power Fund).
Most of the Bank’s mutual funds and
discretionarily managed model portfolios
outperformed their respective benchmark
indices during the year. Because of our
managers’ general focus on quality compa-
nies with reasonable valuations, our asset
management business often performs
better in a weak market climate. Our funds’
scores in external rankings continued to
improve during the year, both in terms of
returns and sustainability.
Ålandsbanken Fondbolag and the
Swedish-based wind power company OX
deepened and extended their cooperation
agreement during . They signed a
supplementary agreement on the develop-
ment of a second offshore wind power
project that will be located north of the
Åland archipelago and will be called
Noatun North.
The Ålandsbanken Vindkraft Special-
placeringfond invested in several wind
farms during the year. In February, this
special wind power investment fund joined
with Finnish energy company Helen Ab to
purchase the Kalistanneva wind farm pro-
ject in South Ostrobothnia, Finland, from
the French energy operator Valorem.
Kalistannneva will consist of turbines
and its total capacity will be megawatts
(MW). When completed, it will generate an
amount of electricity equivalent to the
power consumption of , households.
In July the Bank of Åland’s wind power
special investment fund, together with
Helen Ab, bought the Juurakko and Karahka
wind farms from the German-based VSB
Group. These two wind farms in northern
Ostrobothnia will operate a total of
turbines. The Juurakko wind farm will have
an output of MW and Karahka about
MW. The Juurakko wind farm was
completed in November.
Late in the Bank of Åland’s wind
power special investment fund and OX
signed an agreement to build the MW
Niinimäki wind farm in Pieksämäki, south
Savo. It will have turbines and when
completed, it will be the biggest wind
farm in eastern Finland, with an annual
energy output of more than gigawatt
hours (GWh).
Generally speaking, the Bank of Åland’s
funds show a good level of sustainability.
Among other things, the carbon intensity
of their activities is low compared to the
mutual fund industry as a whole.
Looking ahead at , there is an unu-
sual level of uncertainty about economic
conditions, monetary and fiscal policy and
capital market performance. We intend to
keep expanding our operations further
during the year, both by launching new
sustainable products and by increasing our
sales and marketing efforts. Good returns,
sustainability and green energy are central
themes of our strategy. The need for “dark
green” investment options is growing and
the Ålandsbanken Green Bond ESG fund
was classified during the year as an Article
product, according to the requirements
of the EU’s Sustainable Finance Disclosure
Regulation (SFDR). We are continuously
exploring new investment alternatives
and will launch new funds in response to
customer demand.
Our investment philosophy is based on
active ownership of quality companies with
reasonable valuations, and during this
philosophy should continue to have good
potential to generate added value for our
customers and fund investors.
Bank of Åland Plc
Annual and sustainability report
Premium Banking
Growing asset management mandates in Premium
In the Premium Banking business segment, we report all private and corporate customers
that are not Private Banking customers.
Put a bit simply, the business segment con-
sists of three customer categories: Premium
Banking concept customers, which are
increasing in number in all geographic home
markets; corporate customers in Åland; and
other customers, who often have a relation-
ship with other Premium Banking customers.
Collaboration between Private Banking
and Premium Banking has continued to
expand in all three home markets. As Private
Banking has seen its customer base shift
increasingly towards very wealthy custom-
ers, some customers previously served by
Private Banking have moved to Premium
Banking to be offered more time and cus-
tomised service. In recent years, financial
investment business has become increas-
ingly important in Premium Banking. The
Premium Banking offering is characterised
by a high level of personalised service.
Net operating profit from Premium Bank-
ing in totalled EUR . M, which was
EUR . M better than the previous year.
This increase was largely explained by the
proceeds from the transfer of the Bank’s
Swedish mortgage portfolio to Borgo. Due
to rising interest rates, the classic deposit
business began to contribute positively to
net interest income.
Customer surveys continue to confirm
that our customers appreciate the personal-
ised service that we provide. Customer satis-
faction was at an all-time high in . To a
great extent, our customers are willing to
recommend us to their friends.
We continuously invest in skills enhance-
ment. Our employees participated in both
internal and external training during the year.
Åland Corporate Services and
Corporate Banking
The Bank of Åland’s Corporate Services unit
is the market leader in Åland and offers a
wide range of services and products
adapted for Åland-based companies.
The Corporate Banking unit handles large
corporate groups with an international focus
domiciled in Åland. In addition, it offers
advanced financing services to existing and
potential customers through Private Banking
on the Finnish mainland and in Sweden.
To bridge over the negative impact of the
coronavirus pandemic and related restric-
tions on companies, during the Corpo-
rate Services unit offered liquidity loans to
Åland-based companies supported by the
Åland provincial government. The Åland
business community is also being offered
funding guaranteed by the European Invest-
ment Fund (EIF). Thanks to such guarantees,
the Bank of Åland’s capital and credit risk
expenses decrease, which in turn benefits
companies. As a result, the Bank has been
able to offer more favourable funding terms
for small and medium-sized companies that
want to expand their operations or make
environment and sustainability-related
investments, for example.
The ambition of the Corporate Services
unit is to be at the forefront in supplying the
Åland business community with capital to
invest in the transition to a more sustainable
society. During the year, the unit continued
its involvement in projects and working
groups organised by the Åland Chamber of
Commerce and the provincial government.
In this way, the Bank of Åland can contrib-
ute to a positive view of entrepreneurship
and give business owners the opportunity
to get started or expand their operations
more easily.
Volume increases and a broader business palette
Bank of Åland Plc
Annual and sustainability report
Photographer: Therese Andersson
Partnerships
Sofie Holmström, Manager of the Partnerships Business Area.
Today the Bank of Åland’s partnerships
stand on three stable legs. We collabo-
rate with and supply banking services to
Swedish fintech companies and to the
Swedish mortgage company Borgo. We
are a service provider in the payments
field in both Sweden and Finland. We
also have ownership stakes in four part-
ner companies: Dreams, Doconomy,
Borgo and since late also Plusius.
Since we started our collaboration with the
Swedish-based company Dreams in ,
the Bank has had the opportunity to gain
broad experience of working with financial
technology (fintech) companies. In recent
years, the operations of fintech market play-
ers have evolved towards increasingly spe-
cific product areas, where companies want
to collaborate with a bank that not only has
industry knowledge but can also deliver a
digital platform, IT infrastructure and regula-
tory compliance services.
The Bank of Åland’s ambition is to
broaden its business model through our
partnerships and gain economies of scale
by managing increased volumes of banking
services that are already being produced
by us. Our partnerships include a clear sus-
tainability aspect. When existing resources
are used to a greater extent, this reduces
Bank of Åland Plc
Annual and sustainability report
emissions per unit both in the Bank of
Åland’s own operations and for our partners.
During , the Partnership business
area made a positive contribution to earn-
ings in the Group’s financial statements.
During the past year, the focus has been
on our expanded mortgage collaboration
with Borgo. We now supply banking services
that cover all of Borgo’s operations, from
customer and account management to
lending and deposit services as well as
payments. In addition, we handle Borgo’s
accounting, treasury operations and
regulatory reporting.
In February , the Bank of Åland
transferred its Swedish mortgages and cov-
ered bonds to Borgo. At the same time, the
mortgages provided to customers of ICA
Bank and Söderberg & Partners were also
transferred. These mortgages had been
temporarily handled by the Bank of Åland
pending the launch of Borgo. These trans-
fers had a positive effect on earnings in
. The Bank of Åland now has two new
business volume categories: “Managed
mortgage loans” is a revenue item in the
Partnerships business area and “Distributed
mortgage loans” is a revenue item in the
Bank’s Swedish business area. During ,
we also continued project work on complet-
ing the Bank of Åland’s platform service.
The year was marked by extensive deliveries
in the lending area.
To enable the continued rapid expansion
of the Åland Index, during the Bank of
Åland chose to sell the intellectual property
(IP) rights for this carbon footprint calcula-
tion tool to Doconomy, which had already
established the Åland Index as a global
banking standard. During , growth con-
tinued. Today, the Åland Index reaches more
than countries and million people.
Aside from the Bank of Åland, international
players such as BNP Paribas, Mastercard,
Standard Chartered and Klarna also rely on
the Åland Index to help meet the sustaina-
bility goals of companies and customers.
In , Doconomy opened offices in New
York and Tokyo.
Doconomy’s success is shared by the
Bank of Åland through our per cent own-
ership stake and also because we can offer
our customers new products. In addition to
showing an individual’s carbon footprint,
the Åland Index can now also show how
consumption affects individual water use.
This new feature will be offered to our
customers in the future.
By the end of , the Bank of Åland
had handled more than , fully digit-
ised customer and account openings
through its partnerships. Every month, our
digital solutions manage and mediate more
than , payments as well as thou-
sands of loans and fund savings accounts.
Growth is expected to continue during
thanks to volume increases in existing
collaborations and new partners.
Early in the Bank of Åland, together
with Dreams, is launching a savings product
that will help private individuals to become
debt-free faster and achieve balanced every-
day finances. Later in , we will also carry
out a follow-up transfer of Swedish mort-
gages to Borgo. Once this transfer is com-
pleted, our collaboration with Borgo can be
considered fully established.
Over the next few years, collaboration
with Borgo is expected to lead to increased
business volume. This will mainly consist of
more distributed and managed mortgage
loans, which are a service provided to Borgo
and the market players that offer mortgages
as part of this collaboration: ICA Bank, Ikano
Bank, Söderberg & Partners, Sparbanken
Syd and the Bank of Åland’s own Swedish
operations.
We believe that the fintech sector views
the Bank of Åland as a respected and valua-
ble partner. Qualities cited by fintech com-
panies in describing the Bank of Åland are
entrepreneurship, a full product range,
sustainability and experience.
The Bank of Åland receives about
partnership inquiries annually, and we
continuously evaluate what projects can
generate added value for both parties. In our
evaluation process, we attach great impor-
tance to the Bank’s sustainability goals being
shared by the potential partner. More specif-
ically, we focus on social sustainability by
ensuring good regulatory compliance,
such as anti-money laundering and data
protection for customers.
In the payments field, the Bank of
Åland’s palette of solutions and services is
well equipped for further expansion through
existing and new partnerships. Late in ,
the Bank of Åland initiated collaboration
with the Swedish startup company Plusius,
which develops payment services for inter-
national e-commerce. At the same time, we
chose to make an investment in the com-
pany. During we expect a volume
increase both via Plusius and our established
partnerships in the payments field.
Crosskey is continuing to grow
Information Technology
Niclas Södergård, Managing Director at Crosskey Banking Solutions Ab Ltd.
0
5
10
15
20
25
20222021202020192018
Non-Group income, Crosskey
EUR M
Bank of Åland Plc
Annual and sustainability report
During , Crosskey continued its expansion by adding both new customer and
more employees. The number of full-time positions at the Bank of Åland’s IT subsidiary
grew to a net gain of compared to year-end .
As the Bank’s partnership business grows,
Crosskey is becoming an increasingly impor-
tant part of the Group. Crosskey and its
parent Bank are supplying more and more
package solutions to financial services
companies.
The year started on a positive note, with
POP Bank choosing Crosskey to renew its
core banking system. The POP Bank Group
is a Finnish financial group consisting of
cooperative banks, the non-life insurance
company Skadeförsäkring Ab, the central
credit institution Bonum Bank Plc and the
POP Bank Centre coop. POP Bank expects to
launch the new banking system during .
During , Crosskey continued to
deliver important components to Borgo.
The single biggest milestone was the trans-
fer of the Bank of Åland’s Swedish mortgage
loan portfolio to Borgo.
During , Sweden’s Länsförsäkringar
Bank began using Crosskey’s capital
markets system.
In the payments field, major changes are
taking place throughout Europe and espe-
cially in Sweden. During , Crosskey
delivered its SEPA Instant payment solution
and continued its development work for the
P Nordic multicurrency digital payments
platform, ahead of Sweden’s transition to
the new platform.
There is heavy customer interest in
Crosskey’s payment solutions, and during
we attracted more new customers.
Crosskey achieved Payment Card Industry
Data Security Standard (PCI DSS) certifica-
tion for the tenth year in a row.
In the sustainability field, Crosskey
introduced various hybrid work solutions
for all employees in the aftermath of
the pandemic.
Bank of Åland Plc
Annual and sustainability report
Corporate units
Corporate units
Photographer: Viktor Fremling
Tove Erikslund, Chief Administrative Ocer; Jan-Gunnar Eurell, Chief Financial Ocer;
and Juhana Rauthovi, Chief Risk & Compliance Ocer.
CFO Corporate Unit
Chief Financial Ocer Jan-Gunnar Eurell is
in charge of the Treasury and Group Finance
departments. The CFO Corporate Unit has
about employees in Mariehamn, Helsinki
and Stockholm.
Treasury is directly responsible for about
one fifth of the Bank of Åland’s balance
sheet through liquidity management and
capital market borrowing and indirectly for
the entire Group’s balance sheet regarding
interest rate risk, currency risk and liquidity
risk. Treasury operations are of great impor-
tance to the Bank’s profitability.
In recent years, Treasury has carried out
several new types of capital market transac-
tions. Moving the Bank’s Swedish mortgage
business to Borgo during the first quarter of
was another unique transaction, which
that meant that the Bank of Åland’s own
Swedish mortgage banking operations
closed and the Bank’s balance sheet struc-
ture changed. During , the Bank of
Åland’s capital, liquidity and funding situa-
tion will once again be affected by the final
transfer of Swedish mortgages to Borgo.
During the fourth quarter of , the
Bank of Åland took out a Longer-Term
Financing Operation (LTRO) loan of EUR
million from the European Central
Bank, with one of its own covered bonds as
collateral. The loan was taken out in order to
deal with a EUR M Targeted Longer-Term
Financial Operation (TLTRO) loan that
matured a few weeks later and an outstand-
ing covered bond in a net amount of EUR
M that matured in January .
A new covered bond law entered into
force in July . It stipulates that bonds
issued under the old law should be in one
pool and bonds issued under the new law
should be in another pool. The Bank of
Åland has not yet issued any bonds under
the new legislation.
Rapidly rising market interest rates and
the fact that zero is no longer a high interest
Bank of Åland Plc
Annual and sustainability report
rate are necessitating new liquidity and
interest rate risk management solutions to
achieve high returns in the treasury port-
folio, while dealing with market risks.
The proportion of cash equivalents and
deposits in central banks thus fell signifi-
cantly during the year.
The task of Group Finance is to deliver
public information to the market and regula-
tory authorities, but also to develop and
manage the Group’s financial and business
controls. In addition, the department has
Group-wide responsibility for the purchasing
process, ownership of shared technical plat-
forms and systems as well as workplaces
and data warehousing.
Today the Bank of Åland Group’s finan-
cial statements and internal financial control
reports are ready on the fifth banking day
after each report period. Estimated cus-
tomer analysis and profitability reports are
updated from the data warehouse. Work-
station equipment has been gradually
modernised and rationalised. A systematic
effort to streamline purchasing and supplier
relationships has led to gradually lower
expenses for purchased services. Sustaina-
bility has become an integral part of opera-
tional planning as well as financial reporting.
One new step during was to legally
include the subsidiary Crosskey’s finance
department in the Group Finance organisa-
tion. The purpose is to thereby include
Crosskey to a greater extent in Group pro-
cesses such as operational management,
internal accounting, financial statements,
reporting and purchasing.
Another future area of collaboration with
Crosskey is business intelligence and data
use. Several senior key individuals have
been recruited in recent years to reduce
dependence on outside consultants and
drive development work in this field. The
Group’s growing sustainability report also
places great demands on data.
The processes within all functions of the
CFO Corporate Unit are today of such qual-
ity and efficiency that they stand up well in
an industry comparison. Employee satisfac-
tion and motivation are also high. Never-
theless, the Unit’s ambition is to continue
developing and to become even better and
more efficient.
Two of the platform services that the
Bank of Åland provides to Borgo are
treasury and financial accounting services.
CRO Corporate Unit
Chief Risk & Compliance Ocer Juhana
Rauthovi is in charge of the Risk Control,
Compliance, Operational Risks & Security,
Legal, Credit Scoring and Credit Processes
departments. The corporate unit consists of
about people in Mariehamn, Helsinki
and Stockholm.
The Risk Office Corporate Unit is primarily
entrusted with protecting the Bank of
Åland’s assets, earnings and brand by
providing a framework for risk and credit
management. Its purpose is to maintain
a healthy risk culture that corresponds to the
Bank’s risk appetite and risk-bearing ability.
The Risk Control department is responsi-
ble for independent oversight and reporting
of the Bank’s financial risks. The finan-
cial year was dominated by new regulatory
requirements and their implementation.
This work will continue in . During ,
Risk Control completed an application to the
Finnish Financial Supervisory Authority
(FIN-FSA) for updated credit risk models that
comply with a new definition of default.
Regulatory approval is expected in ,
but until then the new models are not in use.
Risk Control also worked on further develop-
ment of the department’s service deliveries
to Borgo.
Compliance is an independent depart-
ment that identifies and monitors the Bank’s
compliance risks and reports on these to the
Executive Team and the Board of Directors.
The department provides advice and sup-
port to the Executive Team and the Bank’s
business operations on how to manage
compliance risks to ensure that banking
operations are conducted in keeping with
regulatory requirements, with an emphasis
on the interests of customers. In , the
department’s focus was on monitoring and
providing back-up to the Bank’s financial
investment business and on measures to
prevent money laundering and terrorist
financing. The department was also active in
the Bank’s efforts to strengthen oversight
and follow-up of outsourcing arrangements
and to implement new requirements regard-
ing whistleblowing.
Operational Risks & Security is an inde-
pendent department that provides advisory
services, support and recommendations on
managing operational risks. The department
focuses on raising awareness of operational
risks, monitoring compliance within its field
of responsibility and reporting operational
risks and incidents to the Executive Team
and public authorities.
The year was dominated by project work
to further develop the Bank’s records of
processing activities under the EU’s General
Data Protection Regulation (GDPR), transac-
tion monitoring under the renewed Payment
Services Directive (PSD), improved cyber-
security, quality assurance of risk analyses
and support for process development
related to Borgo. The department also
contributes its expertise in process develop-
ment related to partnerships.
The process of integrating climate and
sustainability risks into the Bank’s existing
risk management processes will continue
during .
The Legal Affairs department is responsi-
ble for meeting the needs of the Bank for
legal expertise, since the Bank acts as a
credit institution and issuer of securities.
The department works to monitor regula-
tory changes and provide back-up for both
business areas and corporate units as they
develop and supply products and services to
customers and partners. During the year,
the department focused on the implementa-
tion of new regulations, with an emphasis on
sustainability-related regulations, legal
issues related to outsourcing management,
launching new funds and products from
Ålandsbanken Fondbolag and changes in
existing partnerships.
The Credit Scoring department develops
and carries out credit analysis and oversight
to ensure good credit quality in the Bank’s
lending. In , the department’s role as
a service provider to Borgo increased as that
company’s business expanded.
The proportion of unsettled loans in the
lending portfolio increased during the year,
mainly due to a few large exposures that are
not directly connected to the general
Bank of Åland Plc
Annual and sustainability report
economic situation. The Credit Scoring
department participated actively in deliver-
ies related to the Borgo partnership as well
as deliveries required by European Banking
Authority (EBA) guidelines on loan origina-
tion and monitoring.
The Credit Processes department is
responsible for administering and develop-
ing the Bank’s lending processes and ensur-
ing that they comply with internal and exter-
nal regulations. In , the department’s
focus was on implementing new regulatory
requirements and expanding deliveries
to Borgo.
In the future, the department’s work will
continue to be dominated by regulatory
implementation, including the introduction
of a positive credit register in Finland,
Basel and process development for
our partnerships.
CAO Corporate Unit
Chief Administrative Ocer Tove Erikslund
is in charge of this corporate unit, which
consists of the Business Support, Business
Support Capital Market, Customer Service &
Market Support, Business Development and
Human Resources departments, as well as
the sustainable development unit. The CAO
Corporate Unit has about employees
in Mariehamn.
The CAO Corporate Unit had another devel-
opment-intensive year in . The Busi-
ness Support and Business Support Capital
Market departments are among the largest
clients of the Bank’s prioritised development
projects. These have mainly dealt with
adapting the Bank’s operations to market
and regulatory changes. The changes
include everything from increased know-
your-customer (KYC) and risk management
requirements to major infrastructural
changes in European markets for payments,
clearing and securities settlement. The cor-
porate unit also worked to further stream-
line operations and improve the customer
experience.
During the year, development projects
aimed at improving efficiency focused on
reducing operating and licensing costs for
IT systems, as well as improving systems
back-up and processes for both customer
advisors and back office. To support this
work, we continued to use automation
technology in the form of Robotic Process
Automation (RPA) and data warehousing.
As for customer experience enhance-
ment projects, we enabled our customers to
receive SEPA express payments and use the
Garmin Pay service. During the year, we also
continued our efforts to improve the user
experience and expand the range of ser-
vices and self-service options in the Mobile
Bank and the Internet Office. To further
increase standardisation and create condi-
tions for increased scalability, during
the corporate unit worked to define service
promises and standard offerings.
During the corporate unit’s devel-
opment work will be dominated by regula-
tory adaptations of the Bank’s operations.
Efforts to boost efficiency and strengthen
the customer experience are being run as
priority development projects, and they are
continuing alongside our ongoing improve-
ment work. In the capital markets field,
we also plan to take the next step towards
further harmonising our systems and pro-
cesses, so that in the future we will have the
same systems in Sweden and Finland.
As for administration, the Business Sup-
port department in particular has focused
on creating routines and processes for the
Bank of Åland’s new role as a supplier of
services to the Swedish mortgage company
Borgo. The corporate unit’s work with
administration has also been dominated by
efforts to strengthen operational continuity,
including programmes to ensure the supply
of skills.
The year brought changes in the market
situation that posed new demands, which
the administrative and development depart-
ments have adapted to. During , the
number of customer frauds increased.
Our customers will need to exercise greater
caution and awareness when using our digi-
tal services. We are working continuously to
increase cybersecurity in the Bank of Åland’s
digital channels.
Customer Service volume was about the
same as before: about , cases per
month. Customers can contact the Bank via
phone, the Internet Office and the Mobile
Bank, as well as by email and online chat.
The surveys that we conduct show that
Customer Service maintains high quality
in its encounters with our customers.
Our latest survey provides comparative
background data on some other banks
in Finland and Sweden. The Bank of Åland’s
Net Promoter Score (NPS) is , which is
well above the average of for banks.
General customer satisfaction with the Bank
of Åland is also at a high level.
For the Human Resources department,
largely centred on recruitment efforts
and adaptations to regulatory requirements.
We revised our annual knowledge updates
for customer advisors, while giving skills
supply and skills enhancement top priority.
Bank of Åland Plc
Annual and sustainability report
Sustainability at the Bank of Åland
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
• ESG in the investment process
• Proactive choices
• Ensuring repayment capacity
• Climate strategy
• Treasury’s green framework
• Inclusiveness, diversity
and equality
• Health and well-being
• Community involvement
• Ethical conduct
• The Baltic Sea Project
• The Åland Index
Responsible
investments
Responsible
lending
Social
responsibility
Environmental
responsibility
The Bank of Åland’s sustainability strategy
Sustainability at the Bank of Åland
Sustainability at the Bank of Åland and the year in brief
A cornerstone of our sustainability work is to take environmental,
social and corporate governance (ESG) aspects into account.
This means that our ambition is to include climate and environment,
human rights, social relations and anti-corruption issues in our
processes and activities. This, in turn, leads to sustainability aspects
becoming a natural element of our products and services.
One focus during was to deepen our understanding of
the Bank of Åland’s climate impact and how it should be calculated
correctly. In this work, the biggest challenge remains how we can
best gather reliable data.
Among the year’s important milestones is the climate strategy
that we developed. It describes our path towards the Bank of Åland’s
climate targets, which we set in . The climate strategy helps us
clarify how and at what pace we will reduce the Group’s greenhouse
gas emissions in order to achieve our established climate targets.
The Bank of Åland’s sustainability strategy is an important platform and a tool for ensuring
broad support for our targets, so that our sustainability work moves in the right direction.
The strategy has four focus areas:
. Responsible investments
. Responsible lending
. Environmental responsibility
. Social responsibility
The four focus areas form the basis for our long-term work to
ensure sustainable financial growth. Active risk management plays
a crucial role here. Conduct, business ethics and crime prevention
are also important issues to our stakeholders and are thus essential
to our operations.
Bank of Åland Plc
Annual and sustainability report
Sustainability at the Bank of Åland
Our global commitments
Our sustainability governance
As another source of guidance in our efforts to move our operations towards meeting
the United Nations global goals, the Bank of Åland has joined four international initiatives:
The UN Principles for Responsible Investment (UNPRI)
UNPRI promotes sustainable investments by incorporating environ-
mental, social and governance (ESG) into the assessment of the
companies in which we and our customers invest.
The UN Principles for Responsible Banking (UNEP FI)
Having adopted the UN Principles for Responsible Banking (PRB),
the Bank of Åland is committed to following these six principles:
. Alignment
. Impact and target setting
. Clients and customers
. Stakeholders
. Governance and culture
. Transparency and accountability
During we continued to focus on the second principle,
analysing how the Bank of Åland impacts various aspects of sustain-
ability. We also continued our target setting efforts. With the help
of UNEP FI’s analysis tool, for the first time we were able to conduct
a comprehensive impact analysis of the entire Bank of Åland loan
portfolio. See the results in “Our contributions to the UN’s
global goals.
The Net-Zero Banking Alliance (NZBA)
The Bank of Åland is one of the first members of the NZBA, whose
goal since has been to accelerate the transition of the global
economy to net-zero emissions. Each member commits to aim at
net-zero greenhouse gas emissions by , which is among the
reasons why the Bank of Åland has established its climate targets.
Climate Action
Climate Action is an initiative to support companies with the
largest global greenhouse gas emissions and ensure that they take
the necessary action against climate change.
All development, management and governance of the Bank of Åland’s sustainability work
is based on our materiality analysis, the priorities of our stakeholders, external regulations
and our own ambition to be part of the move towards a sustainable society.
The Board of Directors has the ultimate responsibility for governance
of the Bank’s sustainability work and is actively engaged in sustaina-
bility issues. The Board adopts the Group’s sustainability strategy
and climate strategy.
The Bank of Åland’s Managing Director/Chief Executive, together with
the Group’s Management Team, is responsible for implementing the
decisions on strategic direction made by the Board of Directors.
The Bank of Åland’s Sustainability Team carries out the Group’s over-
all sustainability work and serves as a forum for discussions and deci-
sions. Based on the annual materiality analysis and the sustainability
strategy, a sustainability plan is created for each sustainability area.
The ESG Committee handles monitoring of global events, initiates
and oversees developments in sustainable investments and ensures
that the Bank of Åland’s investment operations follow our strategy
and guidelines for sustainable investments.
The Credit Manager is responsible for ensuring that the Bank’s
lending complies with the established sustainability goals and regu-
lations. The Risk Control Department monitors the Bank of Åland’s
climate risks.
The Bank’s regulatory group compiles all global monitoring results
and maintains a list of the regulations that must be implemented.
Bank of Åland Plc
Annual and sustainability report
emission figures were recalculated according to the same method as figures. The previously reported , K tonnes of CO
e has now been expanded to
, K tonnes of CO
e.
CO
e emissions within various operations
Tonnes of CO
e emissions Reference to note
Activity
Own business operations . S
Investments ,,. S
Loan portfolio , . S
Treasury portfolio ,. S
Totalt ,,.
Our climate strategy
Sustainability at the Bank of Åland
The purpose of the Bank of Åland’s climate strategy is to describe how, based on clear goals,
we will gradually reduce the carbon dioxide equivalent (CO
e) emissions both directly and
indirectly caused by our operations.
The climate strategy defines how we will achieve the climate targets
we have established. Our ambition is in line with the Paris Agree-
ment and the decisions made by Finland and Sweden to achieve
climate neutrality by and , respectively.
In addition, the Bank’s climate target supports Goal of the
Bärkraft initiative for a sustainable Åland: Greatly reduced
climate impact.
The climate strategy includes the Bank of Åland’s three
climate targets:
. The Bank of Åland shall reduce its CO
e emissions by per cent
no later than , compared to .
. The Bank of Åland shall be a climate-neutral organisation no later
than .
. The Bank of Åland shall achieve net-zero emissions by .
The climate strategy rests on a three-part foundation:
• Data and computational models. Here the focus is on collecting
data and applying them in comparable computational models.
Reliable data remain in short supply, especially data for the GHG
Scope accounting standard. Yet it is important to apply the
applicable standards, guidelines and principles at an early stage.
• Application of a criteria structure. By working with different
types of requirements and restrictions, we can ensure that we
achieve our targets. One example is that the Bank of Åland can
demand that the companies we invest in, or fund, have a well
established climate target. As for setting criteria, the conditions
vary for different parts of the Bank of Åland’s operations.
• Target setting and follow-up. To achieve the Group’s targets for
CO
e emissions according to the GHG protocol, the target must
be broken down into different stages and sub-targets, on a
yearly basis and long-term. Follow-up takes place quarterly, and
targets can be adjusted continuously.
Our emissions
The Bank of Åland’s climate strategy covers the part of our opera-
tions for which we count CO
e emissions: the Bank’s investment and
lending operations, our treasury operations and our business opera-
tions. The calculation is based on the GHG protocol and on available
data within Scope , and parts of Scope .
In , the Group’s emissions were ,, tonnes of CO
e,
broken down as follows:
This is a reduction of per cent compared to the emission
figures
, which is a step in the right direction towards the Bank of
Åland’s climate targets.
Climate compensation
We are aware that in the short term we will not be able to reduce all
emissions. This is why we use climate compensation for the portion
of measurable emissions that are connected to our own business
operations, including Scopes and as well as supplier-related
emissions from purchases in Scope (upstream).
Bank of Åland Plc
Annual and sustainability report
Sustainability at the Bank of Åland
The Bank of Åland’s materiality analysis
With the help of our materiality analysis, we can identify areas for sustainable development.
We use this analysis to look at the business from four responsibility perspectives, based on the
UN’s global goals: lending, investment, environment and social issues.
The materiality analysis includes monitoring of global events, identi-
fication of our stakeholders and their interests and identification
of our impact from a sustainability perspective. The analysis is per-
formed in order to identify the most important things we should focus
on in the areas where our business has a positive or negative impact.
Climate and environment are an essential area in which we took
a big step forward in by defining our climate strategy.
As the requirements for transparency and external communica-
tion about corporate sustainability work have increased, the Bank
of Åland’s stakeholders have also gained a more prominent role in
our sustainability work. Demands for sustainability are increasingly
regarded as normal throughout our product range. During ,
we will further intensify our dialogue with stakeholders to gain
better insights into what they need and what drives them to make
various choices.
The Bank of Åland’s main stakeholders:
• Customers
• Shareholders
• Debt investors
• Employees
• Public authorities (regulators)
• Rating agencies
• Resellers
• Suppliers
• Partnership organisations
• Special interest organisations
• Media
Various regulatory requirements increasingly dominate the
everyday activities of the financial services sector. Since more and
more parts of the Bank of Åland’s business are affected, it is a top
priority for the Bank to implement the various requirements and
rules as efficiently as possible. We are thus continuing to develop
our reporting processes and increase our transparency.
In our latest materiality analysis, we see that issues related to
health, well-being and a sustainable working life are of growing
importance to our employees. In its role as an employer, the Bank
of Åland will obviously endeavour to continue offering the best
possible conditions for all employees and thereby maintain a strong
commitment to its workforce and to the community.
The Bank of Åland’s impact is also connected to the exposures
that arise from our financing and investment operations. In ,
an initial PRB impact analysis of the Bank’s loan portfolio was car-
ried out using the UNEP FI Impact Analysis Tool, which examines
several dimensions of social, economic and environmental factors.
Our investment activities were not included in this initial analysis,
but in they will be included.
Bank of Åland Plc
Annual and sustainability report
Our contributions to the UN’s global goals
Sustainability at the Bank of Åland
The impact analysis of the Bank of Åland’s loan portfolio showed that, through our products
and services, we affect various sustainability areas both positively and negatively.
The analysis covered various lending products to retail and corpo-
rate customers in Sweden, the Finnish mainland and Åland. The
results of the PRB impact analysis of responsible lending showed
that through its lending, the Bank of Åland, has an important role in
social change. The analysis shows that we have a positive impact on
the UN’s global sustainable development goal number , Decent
work and economic growth, by offering financial products and ser-
vices. The analysis also shows that we contribute positively to goal
, Sustainable cities and communities, among other things by
providing financing to private individuals as well as construction
and real estate companies, which creates opportunities for housing.
Our negative impact is primarily linked to climate and the envi-
ronment, because through its financing transactions, the Bank of
Åland affects areas such as climate, biodiversity, waste and resource
efficiency. This mainly applies to our financing of private homes as
well as construction and real estate companies.
When we mapped our impact on the UN global sustainable
development goals in , we were able to identify a significant
impact on of the UN’s goals:
• Goal : Clean water and sanitation.
• Goal : Affordable and clean energy.
• Goal : Responsible consumption and production.
• Goal : Climate action.
• Goal : Life below water.
• Goal : Life on land.
In these six areas, we are especially committed to limiting our
impact, and through our established climate targets, we have taken
a firm grip on that challenge.
During , this work will be strengthened. We will formulate a
number of scientifically based emission targets in accordance with
the Science Based Target initiative (SBTi), which provides a method
for the development and validation of scientifically based climate
targets for companies. We will also study and establish more objec-
tives. Our PRB impact analysis will also be expanded to include
responsible investments.
Together with goal , Decent work and economic growth,
the above UN goals continue to be the Bank of Åland’s prioritised
sustainable development goals (see Note S).
Bank of Åland Plc
Annual and sustainability report
Article , funds that have sustainable
investment as their objective
Article , funds that promote environmental
or social characteristics
Other funds
Bank of Åland funds, allocated by SFDR classification,
assets under management
Responsible investments
Sustainability at the Bank of Åland
The Bank of Åland works proactively to decide what we choose, and what we avoid, when we invest
our own and our customers’ money. During , we expanded our calculations for the climate footprint
of investments. These calculations now show emissions figures for all three scopes.
We have a wide range of products and services where the environ-
mental, social and corporate governance (ESG) aspects are fully
integrated into our investment processes. Our products include:
• Bank of Åland mutual funds
• External mutual funds, ETFs and index funds
• Equities
• Bonds
• Discretionary portfolio management
• Consultative investment solutions
We continuously review our product range. As early as ,
Ålandsbanken Fondbolag signed the UN Principles for Responsible
Investment (UNPRI). All of the fund management companies whose
funds we have chosen to recommend have signed UNPRI. At the
end of , Ålandsbanken Fondbolag managed assets worth EUR
billion.
Multiple approaches to achieving
sustainable investments
At the Bank of Åland, we choose investments that are well equipped
to endure, or even be winners, in the environment we live in. We
avoid controversial businesses and those that have high sustainabil-
ity risks. We pursue a proactive dialogue with existing and potential
portfolio companies about their sustainability profile. Our climate
strategy also forms the basis for choosing which companies the
Bank of Åland will either invest in or avoid.
During , our focus was on identifying and measuring emis-
sions in our portfolio companies. As part of the Bank of Åland’s
climate strategy, we require companies to have or to develop
scientifically based climate goals.
During the year, we measured how many companies had joined
or expressed their ambition to join the Science Based Targets initia-
tive (SBTi). By year-end, per cent of our portfolio companies had
initiated the process of changing their operations to be in line with
SBTi and per cent had already joined.
Which ones we choose
We invest in businesses that have good opportunities for success
from a sustainability perspective, such as companies that have
switched from single-use plastic products to more sustainable and
recyclable materials such as wood fibre, paper and cardboard.
Another example is companies that support the transition of society
towards increased electrification and automation.
We pursue a dialogue with companies to help persuade them to
contribute positively to the sustainability challenges that lie ahead.
The Bank of Åland’s climate strategy has also influenced our invest-
ments, since among other things we prioritise renewable energy
sources over fossil ones. Among our bond investments, we prioritise
real estate companies that have issued green bonds to improve their
energy efficiency.
Which ones we avoid
We review all products included in the Bank of Åland’s offering on a
semi-annual basis, both our own funds and external funds. In this
way, we ensure that everyone complies with international conven-
tions and guidelines, such as the UN Global Compact, the OECD
Guidelines for Multinational Enterprises, the UN Guiding Principles
on Business and Human Rights or the ILO Core Conventions on
Labour Standards.
If a company in our investment portfolios were to violate any of
the above agreements for more than two years, the company would
be excluded from all our portfolios. During the two-year period, we
pursue a dialogue with the company in question, with our ambition
being to bring about a positive change.
Our funds also exclude companies that receive more than five
per cent of their sales from the production of tobacco (and canna-
bis), controversial weapons, pornography, gambling or the extrac-
tion of thermal coal.
During our guidelines for excluding companies engaged in
the extraction of thermal coal became stricter, and companies are
excluded if over five per cent of their sales come from this business.
How we exert an influence
In order to achieve positive changes in the companies that are part
of the Bank of Åland’s fund offering, we pursue an active dialogue
with them. We are pleased that after several years of discussions,
we can see that companies are both clearly interested in listening to
their investors and are willing to discuss sustainability-related
developments.
Bank of Åland Plc
Annual and sustainability report
Other service activities
Construction
Real estate activities
Financial and insurance activities
Electricity, gas, steam and air conditioning supply
Wholesale and retail trade; repair of motor vehicles
and motorcycles
Hotel and restaurant activities
Information and communication
Agriculture, forestry and fishing
Arts, entertainment and recreation
Manufacturing
Transportation and storage
Mineral extraction
Water supply, sewerage, waste management and
remediation activities
Legal, financial, scientific and technical activities
Human health and social work activities
tonnes of CO
e
InvestmentsAs for its financial investment business, the Bank of Åland has
signed and supports the following international agreements and
initiatives, among others:
• The UN Guiding Principles on Business and Human Rights
• The ILO Core Conventions on Labour Standards
• The OECD Guidelines for Multinational Enterprises
• The UN Principles for Responsible Investment (UNPRI)
• The UN Global Compact
We also take part in lobbying efforts aimed at public authorities.
We actively participate in inquiries and discussions that add value
and improve the financial service sector’s approach to sustainability
issues. In Finland, this is done through the industry organisation
Finance Finland and in Sweden via the Swedish Securities Markets
Association and the Swedish Investment Fund Association. The
Bank of Åland is also a member of the Finnish and Swedish Forums
for Sustainable Investments (Finsif and Swesif).
Our climate footprint
Since , we have followed up the carbon intensity of all Bank of
Åland mutual funds. Scope level data are now becoming available
for most companies we have invested in. The quality of the data is
still variable, but we believe it will improve significantly over the next
few years. The majority of companies included in our fund offering
have either already joined SBTi or have clearly communicated how
they intend to achieve the goals of the Paris Agreement.
We continuously analyse developments within individual com-
panies and focus on sectors that currently account for the largest
emissions: the manufacturing sector, power producers and basic
industry. Based on reports from companies and the initiatives taken
to reduce their emissions, our assessment is that these companies
will show a gradual improvement in their emissions data in the
coming years. Nevertheless, emission levels for both the individual
companies and whole sectors will probably vary quite a bit from
year to year. This will depend on the economic cycle and capacity
utilisation in more cyclical industries.
When we look at the performance of our equity funds, the car-
bon intensity of these investments has decreased for all three of the
scopes that are measured. Overall, the reduction in intensity was
tonnes of CO
e per EUR M invested, of which the largest reduction
could be seen in Scope emissions due to our efforts to allocate
capital towards more sustainable alternatives. One sector with a
clear reduction was extraction of minerals.
Total emissions from our financial investment business
decreased by per cent in from restated comparable figures
for (see Notes S and S). In spite of this, investments
accounted for the largest percentage of the Bank of Åland’s total
emissions, partly because this area has more extensive calculations.
In there was an increase in the data that formed the basis for
the calculations. For example, real estate investments were included
for the first time. Other portfolio companies have also reported
Scope emission figures, which were previously only estimates.
We foresee large variations in the emission figures over the next few
years as methods evolve.
Bank of Åland Plc
Annual and sustainability report
Responsible lending
Sustainability at the Bank of Åland
Responsible lending is one of the four focus areas in the Bank of Åland’s sustainability strategy.
Our lending operations promote sustainability by ensuring repayment capacity and maintaining
high ethical standards. This is also an important element of the Bank’s new climate strategy.
In lending operations, too, sustainability is a key concept at the Bank
of Åland. When granting loans, we must ensure the customer’s
repayment capacity. In this way, we can ensure a sustainable and
responsible approach.
High interest rates or good collateral do not compensate for
weak repayment capacity. As a responsible lender, we must protect
our customers against problems connected to excessive debt.
Responsible lending benefits the customer, the Bank and society
at large.
Responsible lending is a cornerstone for ensuring that the Bank
of Åland’s sustainability work is moving in the right direction and is
contributing to the UN’s global goals.
Sustainability requirements
The Bank of Åland’s lending must meet high ethical standards.
The sustainability requirements in our lending operations are a way
of working towards human rights, better working conditions and
a healthier climate.
In recent years, we have created a clear analysis of the carbon foot-
print that our lending currently gives rise to. Based on this analysis,
we will now continue our efforts to reduce our environmental impact.
We also want a high level of transparency about our sustainabil-
ity work. We seek closer dialogue with our customers and other
stakeholders. In addition, we also place great emphasis on the
implementation of regulatory requirements and rules.
Climate targets and criteria for lending
Our starting point is that we will provide loans to businesses that
comply with international policies and guidelines for sustainable
development. If customers are not ambitious enough in their
sustainability work, this may lead us to deny them a loan.
As part of the Bank of Åland’s climate strategy, in addition to
the customer’s repayment capacity, our lending operations must be
based on four criteria connected to environmental impact:
. Our corporate customers are expected to sign an agreement to
share the same climate target as the Bank of Åland, i.e., a per
cent reduction in their carbon dioxide emissions by as a
first step.
. The Bank of Åland does not finance activities that produce
non-renewable energy. When financing renewable energy,
including renewable fuels, the Bank shall take into account the
latest international sustainability guidelines in this area.
. When lending to companies that import goods from developing
countries, one requirement is either Fair Trade labelling or
organic/biodynamic labelling.
. Financing of companies in emission-intensive industries will
be limited to a maximum of per cent of the loan portfolio.
Otherwise, the first criterion applies.
Emissions related to our lending operations
The Bank of Åland’s lending to the public, which forms the basis for
our calculations, amounted to EUR , million at the end of .
Our emission calculation includes the entire loan portfolio.
Total emissions attributable to our lending operations in
were , (: ,) ) tonnes of CO
e, or about ,
tonnes less than the restated base year , when our calculations
began. The Bank’s reduced emissions are mainly due to a change in
the sectoral distribution of corporate lending and changes in emis-
sion intensities, as well as a decrease in mortgage loan volume due
to the transfer of Swedish loans to the mortgage company Borgo.
We estimate that our financing of companies and investments
has the largest single impact on the Bank’s financed emissions (a
total of per cent of estimated emissions) in relation to their share
of the loan portfolio (a total of per cent of the loan portfolio).
The financing of traditionally emission-intensive activities such
as energy, agriculture and transport is assumed to contribute a high
individual impact, but these activities represent a marginal part of
our loan portfolio.
The Bank’s target is to reduce the amount of carbon dioxide
emissions by per cent from to . During , the Bank
of Åland’s CO
e emissions thus shifted in the right direction in rela-
tion to one of our climate targets. We still have a long way to go, but
we are looking forward to this important challenge with confidence.
For detailed figures, see Note S and S.
Treasury
During , our Treasury department took its first steps towards
the climate targets established by the Bank of Åland. Treasury is
working on continuously expanding its estimates and boosting its
share of actual emissions data, instead of relying on estimates. This
is happening as standardised calculation models are developed and
as securities issuers expand their sustainability reporting.
To create a clearer connection to the overall situation, we are also
aiming to harmonise emissions reports and existing financial
reports. In this way, we hope to present a clear total picture of the
treasury portfolio’s climate impact, in which we have identified the
most emissions-intensive sectors.
Our climate strategy also includes evaluation of new investments
and existing holdings from a climate perspective. This evaluation is
performed using criteria that indicate whether the securities issuer
has taken, or plans to take, steps to reduce its emissions. Our criteria
are based on scientific objectives, such as SBTi, or on various initia-
tives such as net-zero emission targets.
We also use data on the securities issuer’s CO
e intensity as part
of our decision-making process. For new investments, these criteria
were introduced during , while existing holdings have a transi-
tion period of three years before any of the criteria must be met.
Bank of Åland Plc
Annual and sustainability report
Construction
Real estate activities
Financial and insurance activities
Electricity, gas, steam and air conditioning supply
Public administration and defence;
compulsory social security
Manufacturing
Transport and storage
Rentals, real estate services, travel services and
other supportive services
Operations at international organisations,
foreign embassies etc.
tonnes of CO
e
Treasury
Home loans
Securities and other investments
Other purposes
Other service activities
Construction
Real estate activities
Financial and insurance activities
Electricity, gas, steam and air conditioning supply
Wholesale and retail trade; repair of motor vehicles
and motorcycles
Hotel and restaurant activities
Information and communication
Agriculture, forestry and fishing
Arts, entertainment and recreation
Business activities, private individuals
Public administration and defence; compulsory
social security
Manufacturing
Transportation and storage
Education
Rentals, real estate services, travel services and
other supportive services
Water supply, sewerage, waste management and
remediation activities
Legal, financial, scientific and technical activities
Human health and social work activities
tonnes of CO
e
Loan portfolio
The Bank of Åland’s Treasury department also contributes to the
promotion of long-term sustainability development by issuing green
bonds in accordance with the Bank of Åland’s green finance frame-
work. This framework covers the financing of renewable energy,
more specifically wind and solar power, as well as green buildings
with better energy performance than required by national building
regulations. The independent research institute Cicero Shades of
Green has reviewed the framework from a climate and environmen-
tal risk perspective and made an assessment of its ambitions for the
transition to a more low-carbon society. The green framework
received a rating of Medium Green.
For the time being, the Bank of Åland has an outstanding green
T (supplementary capital) instrument of SEK million, for which
the Treasury department maintains a green asset register. Starting
in , Treasury will publish an annual environmental impact
report, detailing what green projects the green instrument has
funded as well as the amount of CO
e emission savings this funding
has generated. These emission savings are calculated against a
baseline scenario of conventional energy supply for renewable
energy projects and energy performance required by national build-
ing regulations for green buildings. The report will be available on
the Bank of Åland’s website starting in February .
’
Treasury evaluates its impact on the environment and climate by
estimating the carbon emissions related to the treasury portfolio.
The treasury portfolio amounted to EUR , million on Decem-
ber , . Total CO
e emissions amounted to , tonnes. The
emissions calculations are based on the GHG protocol standard and
include Scope , Scope and Scope . Emissions data were collected
from public data sources. Emissions data are missing for per cent
of the portfolio, and estimates for this portion are made using sector
data or comparable securities issuers.
Three per cent of the treasury portfolio accounts for per cent
of total emissions. The most emissions-intensive holdings include
corporate bonds and covered bonds issued by the manufacturing
and energy sectors.
During , Treasury reduced emissions in its portfolio by
per cent compared to the base year . Emission reduction was
achieved mainly by divesting emissions-intensive corporate bonds
and bonds from financial institutions where it seemed financially
appropriate. Since November , Treasury has applied various
emission-related criteria to new investments to ensure that emis-
sions related to its portfolio decrease at the pace required to achieve
the Bank of Åland’s climate targets.
Bank of Åland Plc
Annual and sustainability report
Social responsibility is an important area of sustainability and also one of the four focus areas
in the Bank of Åland’s sustainability strategy. Social responsibility is broad and extends from
our employees to our local community involvement.
Inclusiveness, diversity and equality
Through our work for gender equality and diversity at the Bank
of Åland, we want to create a culture where differences are our
strength. This will also help us to be perceived as an attractive
employer. All employees should have the same opportunities for
a successful career within the Group, regardless of factors such as
gender, age, ethnicity, beliefs, religion or disability.
In our action plan for gender equality and diversity, we place
particular emphasis on ensuring that:
• All employees have equal rights and opportunities in terms of
work and professional development opportunities.
• Both women’s and men’s experiences and knowledge are
utilised and represented in all areas, roles and positions in
our operations.
• No one feel harassed, abused or bullied in the workplace.
Harassment or bullying is unacceptable and shall be
actively combated.
• Gender pay gaps do not occur. Nor should other terms of
employment be different based on gender. Salaries and
allowances shall be determined on objective grounds.
• Working conditions, salaries, benefits and other terms of
employment are designed in such a way that all employees
have the same opportunity to combine work, private life
and parenthood.
It is important that our recruitment processes and selection of
job candidates take place as objectively as possible. We thus work
actively with skills-based recruitment throughout the process.
To ensure that our efforts work in practice, we measure gender
equality and diversity using an in-house index in our employee surveys.
Skills development
To remain competitive in the market, the right expertise and skills
development are a strategic issue and a long-term investment for
the Group. We strongly believe that the continuous professional
development of our employees is crucial to our success and com-
petitiveness. We thus continuously invest in skills-enhancing pro-
grammes according to the -- model, where per cent of
professional development takes place during an employee’s day-
to-day job, per cent occurs in collaboration with colleagues
for example through coaching and mentoring and per cent
consists of more formal training programmes.
We measure the number of hours that employees have partici-
pated in internal and external skills-enhancing training programmes.
These programmes are based on a training plan structured in vari-
ous categories, which also provide the basis for our reporting and
our key figures connected to skills. (See Note S, Employees and
human resources)
Other important skills-enhancing initiatives are the introductory
course for all new employees, which begins even before their first
working day. This introductory course is followed up with training in
their own department and the joint introduction sessions during
their first months at the Bank. Regularly recurring performance
reviews in the form of conversations with managers later define
employees’ individual skills development needs.
We have a strong focus on expanding sustainability awareness
among our employees and we thus organise mandatory training in
sustainability for everyone.
Health, well-being and commitment
The Bank of Åland aims at ensuring a good physical and mental
working environment and a high level of commitment among all
employees. During , we carried out continuous measurements
of employee well-being and commitment using the Temperature
and eNPS models. The results of these measurements are followed
up and analysed so that we can see trends over time. Our long-term
goal is to reach a level of commitment that is above the industry
index. (See Note S, Employees and human resources)
The Bank of Åland’s systematic working environment efforts
include studying, measuring, remedying and following up results
related to the mental and physical working environment. As part of
these efforts, we carry out a risk assessment twice a year. We moni-
tor trends and create action plans in response. In , we devel-
oped a common working environment agenda for our Finnish and
Swedish operations and held joint discussions about the working
environment risks that had been identified.
In the aftermath of the coronavirus pandemic, we have put extra
emphasis on activities that maintain and develop physical and men-
tal well-being. Among other things, employees have been offered
initiatives such as occupational health care and lectures about stress
and stress management. These programmes have also produced
materials that various working groups can study during workshops.
As an expression of gratitude for all their great efforts during
, Group employees were rewarded during with an
increased wellness allowance. Also much-appreciated is the bicycle
benefit for employees in Åland and on the Finnish mainland an
environmentally friendly alternative to cars and public transport.
At the Bank’s head office in Mariehamn there is a staff gym, where
employees interested in physical training instruction offered their
colleagues free personal trainer sessions during the year.
In , the Group launched a share savings programme for all
employees. This one-year programme began in July and percent
of employees chose to participate. The aim of the programme is to
further strengthen employee motivation, participation and long-
term affiliation with the Bank of Åland.
Social responsibility
Sustainability at the Bank of Åland
Bank of Åland Plc
Annual and sustainability report
Leadership
Throughout the Group, we see leadership as a strategically impor-
tant area for achieving our employee commitment and well-being
goals. We thus continuously monitor the results of our leadership
index. (See Note S, Employees and human resources)
To strengthen their leadership skills, our managers receive ongo-
ing information, training and support. During , all managers
underwent a six-part leadership program. The goal is to encourage
leadership that focuses on participation, relevance and professional
development. Our annual leadership forums have included a focus
on corporate culture and values, and these are themes that we want
to continue working on in the coming years.
Community involvement
The Bank of Åland is an active player in the business sector and
we are broadly involved in the community, especially in Åland.
In December, Bank of Åland employees in cooperation with the
humanitarian aid organisation Ukrainahjälpen and the Åland Red
Cross organised a Christmas gift drive for Ukrainian refugee
children. We plan to carry out at least three similar programmes
annually.
In Åland, we are a major employer. We thus have a social respon-
sibility to provide interesting and stimulating work opportunities
that will enable the Åland community to remain highly attractive.
We want to offer work both to recent graduates and people with
long professional experience.
We have built up various forms of collaboration with schools in
Åland, both at university level and with other organisations such as
language training programmes.
Ethical conduct
An ethical approach and conduct are crucial for the Group’s opera-
tions. We work continuously to ensure that employees maintain a
high ethical level in their work and that we all comply with laws,
rules and sound financial market practices.
Our Code of Conduct and our values are an expression of a
common approach that should permeate our operations and form
a stable basis for our daily work. We ensure this through various
forms of skills development and follow-ups. Our employees
undergo mandatory training every year. We meet the existing
licensing requirements for the financial services sector in Sweden
and Finland.
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Emissions from owned and
controlled sources
Energy-related emissions
Purchased goods and services
Capital goods
Transport and distribution
Waste generated by own operations
Business travel
Leased assets
tonnes of CO
e
Emissions from the Bank´s own operations
Due to Åland’s geographic location in the Baltic Sea, it has always seemed
natural for the Bank of Åland to devote itself to environmental issues.
Initiatives such as the Baltic Sea Project, the Baltic Sea Card and
Åland Index Solutions have helped us to spread environmental
awareness to our customers. Through the Baltic Sea Account,
we also ensure that the contributions we make to the Baltic Sea
have a tangible climate impact. During , we worked to increase
our understanding of the impact our own business operations have
on water, biodiversity and ecosystems, among other things.
In order to improve our environmental work and achieve the
Bank of Åland’s environmental targets, we know it is crucial that
our employees continuously participate in skills development on
sustainability issues.
Our own emissions
In , the Bank of Åland continued its focus on emission calcula-
tions according to the GHG protocol. The method we use to estimate
our CO
e emissions is based on applying the Åland Index to the
costs of our own operations. In keeping with the GHG protocol,
we report emissions in three scopes: The Bank of Åland’s business
operations are part of Scope , and this includes cars owned or
leased by the Group and their fuel. Scope includes our energy
consumption and Scope (upstream) includes supplier-related
emissions from our purchases.
The Bank of Åland’s emissions from its own business operations
in were . tonnes of CO
e. This was an increase of .
tonnes compared to (. tonnes of CO
e, recalculated during
from the previous estimate, which was . tonnes of CO
e).
The increase was largely due to increased emissions from
business travel.
The number of company cars used by the Bank of Åland is very
small, and since the autumn of the electricity we buy has been
per cent environmentally certified. Consequently, Scopes and
make up a small fraction of our total emissions. But Scope
(upstream), including our own purchases, is the part of our business
where we see the largest quantity of emissions. In this category,
our business trips are a significant item. After the restrictions of the
pandemic years, travel has again increased. The value of in-person
meetings has led to an upswing in the number of trips, which has
had a negative impact on our ambition to reduce carbon dioxide
emissions from travel.
In our energy consumption, we see a clear improvement. In
, the share of environmentally certified electricity increased
from an average of per cent in to per cent in .
At year-end, the share of environmentally certified electricity was
per cent.
Climate compensation
In , we provided climate compensation for the CO
e emis-
sions included in Scopes and and measurable supplier-related
emissions in Scope (upstream). Of the Bank of Åland’s compen-
sation portfolio, per cent consists of projects that reduce and
store greenhouse gases. The remaining per cent consists of
innovation projects, such as technologies for capturing and
storing carbon dioxide.
Sustainability at the Bank of Åland
Environmental responsibility
Bank of Åland Plc
Annual and sustainability report
Business ethics, anti-crime work and information security
Sustainability at the Bank of Åland
The Bank of Åland’s operations maintain a high level of business ethics. In addition to laws and regulations,
we also follow our own policy documents and guidelines. Our guidelines formulate a common approach to
ethical conduct, which is the basis of our entire business.
We prevent and take steps to proactively prevent the Bank of Åland
from being used for money laundering, terrorist financing, fraud or
corruption. This work is important to enable us to take social respon-
sibility and contribute to a long-term sustainable society. Measures
to protect information about our customers and the bank are impor-
tant to combat all forms of financial crime.
Money laundering and terrorist financing
Thanks to the existence of internal regulations, we can counteract,
prevent and reduce the risk that the Bank of Åland will be used for
money laundering and terrorist financing. The Bank complies with
international and national sanctions decisions. We prevent financial
resources from being channelled or made available to persons or
organisations that are on a sanctions list.
Bribery and corruption
Our work to identify, combat and counteract bribery and corruption
at the Bank of Åland is supported by internal regulations. We follow
industry-wide recommendations, as well as our own regulations
regarding entertainment, sponsorship and gifts. Bribery and corrup-
tion are, of course, criminal acts, but in many cases our work to
prevent bribery and corruption is also a matter of trust. As a player
in the banking and financial services sector, we enjoy a special level
of trust from the public.
Information security
We work continuously to combat cyber-threats and raise awareness
among employees. The Bank of Åland’s Information Security Man-
ager offers employees and systems owners support and advice on
security issues. In addition to our own regulations, we follow the
rules of the Finnish and Swedish Financial Supervisory Authorities.
The auditing company KPMG performs an IT audit of the Bank of
Åland’s systems every year.
Examples of the Bank’s information security work are the regular
penetration tests that are performed on all digital services that we
offer our customers. All new development work also includes pene-
tration tests when it comes to designing safety components.
The Bank of Åland also follows internal regulations on how we
process personal data with a good level of security. We also have
processes in place to prevent access and unauthorised use of both
personal data and the equipment used for data processing.
Whistleblowing
We work proactively to detect and prevent violations of internal and
external regulations or misconduct in our business operations. In
this way, we can follow good corporate governance principles and
maintain a high standard of business ethics. As part of this work,
we use an internal reporting system to draw attention to irregulari-
ties. To enable all our employees to feel safe with our whistleblowing
system, the user’s identity is protected, which minimises any risk
of retaliation.
Bank of Åland Plc
Annual and sustainability report
Sustainability at the Bank of Åland
A number of European Union regulations and directives affect the Bank of Åland’s
operations and sustainability reporting. They serve as a platform for our reporting.
Below is a description of the three main ones: the Taxonomy Regulation, SFDR and CSRD.
The Taxonomy Regulation
The EU Taxonomy Regulation is a tool for classifying what economic
activities are environmentally sustainable, thus helping investors
identify, compare and direct capital towards sustainable
investments.
The Taxonomy Regulation consists of six environmental
objectives:
. Climate change mitigation
. Climate change adaptation
. Sustainable use and protection of water and marine resources
. Transition to a circular economy
. Pollution prevention and control
. Protection and restoration of biodiversity and ecosystems
The reporting obligation for the first two environmental objec-
tives entered into force in . Reporting for the four other objec-
tives will be implemented gradually.
During , we continued to improve the underlying data qual-
ity to ensure that we can meet future reporting requirements within
the Taxonomy Regulation and other sustainability-related regula-
tions. See note S on our reporting.
SFDR
The Sustainable Finance Disclosure Regulation (SFDR) is the EU
regulation on sustainability-related disclosures. The purpose is to
create a standard for how the financial services industry presents
sustainability information about its products. In , we published
sustainability information about our funds and model portfolios as
well as a so-called Principal Adverse Impact (PAI) report, which
shows how we pay attention mainly to negative consequences for
sustainability factors when making investment decisions.
In line with amendments to the second Markets in Financial
Instruments Directive (MiFID ), we have also initiated the task of
asking for our customers’ sustainability preferences when providing
investment advisory services. Since our customers will base future
investment decisions on their sustainability preferences, this will
partially fulfil the EU’s objective that capital should increasingly flow
into sustainable investments.
CSRD
In , the Bank of Åland initiated a prioritised project for the
newly enacted Corporate Sustainability Reporting Directive (CSRD).
After national implementation, CSRD will be applied starting
in .
The key feature of both CSRD and the new European Sustain-
ability Reporting Standards (ESRS) is the double materiality analysis,
which includes both an impact assessment and a financial
risk analysis.
What the EU’s regulatory framework means to us
Bank of Åland Plc
Annual and sustainability report
Sustainability at the Bank of Åland
Governance and management of climate-related risks
Climate change gives rise to both physical and transition risks. An example of
physical risks is extreme weather that may prevent our employees from getting
to their workplace or adversely affect the Bank’s suppliers.
How the Bank of Åland manages climate risks
Transition risks are associated with the extensive structural change
in the economic system as society shifts to a carbon-neutral econ-
omy. This transition affects not only the Bank of Åland, but the
entire financial services sector. The ESG requirements imposed on
banks through various regulations are also evolving at a rapid pace
and expanding in scope.
All in all, these factors require us to analyse the impact that cli-
mate change may have on the Bank’s operations, both in the short
and long term. We need clarity about what kind of processes are
needed in order to manage each individual risk that we identify.
We foresee that climate risks will affect us in all areas for which
we already have risk management processes. Our long-term strat-
egy is thus to integrate climate risks as a natural element of the risk
areas we are already working with today. Initially, we still want to
keep climate risks as a separate area. In that way, we will ensure that
we give climate risks the priority and visibility required to accelerate
the work that needs to be done, and then be able to integrate cli-
mate risks into our existing processes.
Our exposure to climate risks
Through our own business operations, we are directly exposed to
climate risks. Indirectly, we are exposed to these risks through the
customers we finance. In our lending operations, risks are associ-
ated with the geographies and sectors across which our loans are
spread. In our lending to households, we primarily foresee exposure
to transition risks related to the energy efficiency of homes and
physical risks such as flooding.
In our corporate loan portfolio, exposure to climate risks is
mainly found in the sectors we lend to. We generally have relatively
low exposure to such classically carbon-intensive sectors as energy,
transport and agriculture. On the other hand, we foresee exposure
to transition risks in our lending to the real estate and financial ser-
vices sectors, where the risks consist of demands for increased
energy efficiency and the risk of stranded assets.
We must also take into consideration the climate-related risks
that our own business operations face. As mentioned earlier, acute
physical risks include extreme or unforeseen weather events.
These may lead to damage to the Bank of Åland’s real estate or
other property, affect suppliers or their subcontractors and
employees’ ability to perform their work. These risks may interfere
with or cause disruptions to our business. We must also take into
consideration reputational risk, based on the public’s expectations
of the Bank of Åland related to the management of climate- and
environment-related risks.
Developmental phase
The Bank of Åland’s efforts to manage climate-related risks are in
the developmental phase. Among the factors driving these efforts
are the development of the financial service sector’s climate change
impact management and the regulations that are being introduced.
As the Bank reduces its exposure to carbon-intensive sectors, this
also decreases our exposure to transition risks when these sectors
shift towards lower-emission operations.
In , we will base our efforts on the initial work that has
been done to identify climate-related risks. From there, we will
begin developing methods for measuring and reporting these
risks. Like most players in the financial services sector, the Bank
of Åland also needs to develop and gain access to more compre-
hensive data. This is an area where we expect to take major steps
forward over the next few years, while introducing more precise
measurement methods.
Bank of Åland Plc
Annual and sustainability report
Report of the Directors
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Report of the Directors
Macro situation
The year will probably go down in history
as one of the most dramatic years in modern
times. After the COVID- (coronavirus) pan-
demic had finally begun to release its two-year
long grip in Finland and Sweden, on February
Russia began a full-scale war of invasion
against its neighbouring country of Ukraine.
The changing security situation in Europe has
been accompanied by soaring energy prices
and an inflation shock.
During , the European Central Bank and
Sweden’s Riksbank both hiked their key interest
rates by a total of . percentage points, and
both have declared their intention to implement
further key rate hikes aimed at combating infla-
tion. The Bank of Åland has substantial positive
net interest income sensitivity to rising short-
term market interest rates.
,
,
Euribor mo . –.
Euribor mo . –.
Stibor mo . –.
During the year, share prices according to
the Nasdaq Helsinki stock exchange’s OMXHPI
index fell by per cent, while the Nasdaq
Stockholm’s OMXSPI index fell by per cent.
The average value of the Swedish krona
(SEK) in relation to the euro (EUR) was per
cent lower during than during the prior
year, and at year-end it was per cent
lower than at the end of . When converting
the income statement of the Bank’s Swedish
operations into euros, the average exchange
rate for the period has been used, while the
balance sheet has been converted at the
exchange rate prevailing on the closing day
of the report period.
Important events
Finland’s POP Bank chose the Bank of Åland’s
subsidiary Crosskey as its central banking sys-
tem partner. On January , POP Bank
signed a cooperation agreement with Crosskey
on the renewal of its core banking system. POP
Bank anticipates that it will introduce the new
core banking system during .
On February , the Bank of Åland trans-
ferred most of its Swedish mortgage loans and
related previously issued covered bonds to
Borgo AB (publ), in which the Bank of Åland’s
ownership stake amounts to per cent. The
nominal amount of the mortgage loan portfolio
that was transferred was SEK . billion. The
nominal amount of the previously issued cov-
ered bonds, which now have Borgo as their
issuer, was SEK . billion.
The transaction had a nonrecurring positive
effect in the Bank of Åland’s income statement
of SEK . M. At the same time, this will mean
a smaller loan portfolio in the Bank of Åland’s
own balance sheet and thus a lower current net
interest income. The Bank of Åland will instead
receive distribution fees for brokered loans
and platform revenues for maintaining various
services to Borgo. However, ICA Bank and
Söderberg & Partners continued to use the
Bank of Åland’s balance sheet for certain types
of new mortgage loans, which will be trans-
ferred to Borgo during .
On March , , the Annual General
Meeting (AGM) approved the distribution of a
dividend of EUR 2.0 0 per share for the financial
year (a regular dividend of EUR . plus an
extra dividend of EUR .).
The AGM also decided to authorise the
Board to approve acquisitions of no more than
,, of the Bank of Åland’s Series B
shares, which is equivalent to about per cent
of all shares in the Company and about per
cent of all Series B shares in the Company.
The AGM elected Mirel Leino-Haltia as a new
member of the Board of Directors. Board mem-
bers Nils Lampi, Christoffer Taxell, Åsa Ceder,
Anders Å Karlsson, Ulrika Valassi and Anders
Wiklöf were re-elected. At the statutory meeting
of the Board the same day, Nils Lampi was
elected as Chairman and Christoffer Taxell as
Deputy Chairman of the Board.
During , the Bank of Åland bought back
and annulled , of its own Series B shares
for EUR . M. The Bank also issued , new
Series B shares due to its obligations as part of
the employee incentive programme.
The Bank of Åland launched a new share
savings programme for all Group employees.
Employees can save a maximum of five per cent
of their monthly salary in order to subscribe for
twice-yearly targeted issues of Series B shares.
The savings period began in July , and the
programme will run for one year.
Three years after each respective share
issue, the Bank of Åland will distribute one free
matching share for each share that has been
acquired in the targeted share issues to those
who have participated in the share issues and
who are still employed by the Group and own
0
3
6
9
12
20212020201920182017
Average EUR/SEK exchange rate
–1.0
–0.5
0.0
0.5
1.0
20222021202020192018
Euribor/Stibor, -month averages
Per cent
Euribor Stibor
–30
–15
0
15
30
20222021202020192018
OMXHPI and OMXSPI
Per cent
OMXHPI OMXSPI
Bank of Åland Plc
Annual and sustainability report
the shares that were issued. Employees will be
offered the opportunity to subscribe for Series
B shares at a price that is per cent below the
average price during the calendar month before
each respective share issue.
By the end of the application period, per
cent of Group employees had joined the share
savings programme. The savings amount for
those who have joined the programme is about
EUR . M, which would be equivalent to about
, Series B shares, based on the average
share price in December including a per
cent discount. The number of matching Series B
shares is estimated at ,. The projected
number of shares that employees may receive
as part of the share savings programme is
about ,.
In November the Bank of Åland’s
mutual fund company Ålandsbanken Fondbolag
and the Swedish energy company OX signed a
memorandum of understanding to develop an
offshore wind power project in the Baltic Sea
south of Åland. This collaboration was
expanded in May to include an additional
project north of Åland. In September the parties
signed a binding agreement. Because the task
of analysis and environmental impact assess-
ment has begun, the project is included in
OX’s development portfolio. The projects,
known as Noatun South and Noatun North, are
being run via two joint ventures in which OX is
the developer and Ålandsbanken Fondbolag is
a long-term shareholder via its mutual funds.
In addition to offshore wind farms in the Åland
maritime zone, the Noatun projects also include
a grid solution for the distribution of electricity
to Åland, Sweden, the Finnish mainland
and Estonia.
Earnings
Net operating profit decreased by EUR . M or
per cent to EUR . M (.). About EUR M
of net operating profit for the report period was
attributable to nonrecurring items, compared to
about EUR . M in the previous year.
Profit for the period attributable to share-
holders decreased by EUR . M or per cent to
EUR . M (.).
Return on equity after taxes (ROE)
decreased to . per cent (.).
Total income rose by EUR . M or per cent
to EUR . M (.). Core income in the form
of net interest income, net commission income
and information technology (IT) income
increased by EUR . M or per cent to EUR
. M (.).
Net interest income rose by EUR . M or
per cent to EUR . M (.). A higher interest
margin with market interest rates shifting
from being negative to being positive offset
lower lending volume. Lending volume was
lower because on February , the Bank of
Åland transferred most of its Swedish mortgage
loans to Borgo.
Net commission income fell by EUR . M or
per cent to EUR . M (.). Income from
the Bank’s asset management business was
lower, while income from distributed mortgage
loans as well as platform income for managed
mortgage loans contributed to higher commis-
sion income.
IT income fell by EUR . M or per cent to
EUR . M (.). The decrease mainly came
from lower project income.
Other income, including net income on
financial items, increased by EUR . M or
per cent to EUR . M (.), mainly thanks to
a capital gain of EUR . M from the transfer of
most of the Bank’s Swedish mortgage loans.
Capital gains from the liquidity portfolio also
helped increase other income. The amount
included positive nonrecurring income con-
nected to associated companies and the divest-
ment of intellectual property (IP) rights.
Total expenses increased by EUR . M or
per cent and amounted to EUR . M (.).
Higher staff costs and expenses for premises
and property, consultants and business travel
plus a substantially higher stability fee to
Finland’s Resolution Fund were the main rea-
sons. Production for own use also decreased.
Among costs of premises and property was
an allocation of EUR . M for a new office
in Helsinki.
Net impairment losses on financial assets
amounted to EUR . M (.), equivalent to a
loan loss level of . (.) per cent. These
impairment losses were mainly due to a small
number of individual loans. Due to lower risk of
future loan losses related to the coronavirus
pandemic, the Bank withdrew its entire previ-
ous coronavirus reserve during .
Tax expense amounted to EUR . M (.),
equivalent to an effective tax rate of . (.)
per cent.
Operating segments
The Group’s decrease of EUR . M in full-year
net operating profit to EUR . M was allocated
as follows:
Net commission income
EUR M
0
20
40
60
80
20222021202020192018
Total expenses
EUR M
0
30
60
90
120
150
20222021202020192018
Net interest income
EUR M
0
20
40
60
80
20222021202020192018
Profit attributable to shareholders
EUR M
0
10
20
30
40
50
20222021202020192018
Bank of Åland Plc
Annual and sustainability report
• Private Banking –.
(higher impairment loss provisions)
• Premium Banking .
(divested mortgage loan portfolio, higher
net interest income))
• IT –.
(lower project income)
• Corporate Units & Eliminations –.
(nonrecurring effects)
Business volume
Actively managed assets on behalf of custom-
ers decreased by EUR , M or per cent
compared to year-end , despite continued
strong net inflows from customers, and
amounted to EUR , M (,). The decrease
was due to a negative market effect.
Deposits from the public rose by EUR M
or per cent compared to year-end and
amounted to EUR , M (,).
Lending to the public decreased by EUR
M or per cent compared to year-end
and totalled EUR , M (,). The trans-
ferred Swedish mortgage loan portfolio was the
reason for this big change. Underlying lending
grew by EUR M.
Starting in , the Bank of Åland is report-
ing a new business volume item in the form of
managed mortgage loans. On December ,
, managed mortgage loans totalled EUR
, M. This business volume item generates
continuous commission and IT income.
Balance sheet total and o-balance
sheet obligations
During the Group’s balance sheet decreased
by EUR M or per cent to EUR , M
(,). The decrease was primarily explained by
the Swedish mortgage loan portfolio and related
covered bonds, which were transferred to Borgo
AB. Off-balance sheet obligations rose by EUR
M or per cent to EUR , M (,). The
increase was mainly related to lines of credit.
Credit quality
Lending to private individuals comprised per
cent of the loan portfolio. Home mortgage
loans accounted for per cent of this. Loans for
the purchase of securities, with market-listed
securities as collateral, comprised the second-
largest type of lending to individuals. Histori-
cally, the Bank of Åland has not had any signifi-
cant loan losses on this lending segment. The
corporate portfolio has a close affinity with the
retail portfolio, since many of the companies
are owned by customers who, as individuals,
are also Private Banking customers.
The Bank of Åland Group had EUR . M in
impairment loss provisions on December ,
(. on December , ), of which EUR
. M (.) in Stage , EUR . M (.) in Stage
and EUR . M (.) in Stage . Stage loans as
a share of gross lending to the public totalled
. per cent (.). The level of provisions for
Stage loans amounted to () per cent.
Most of these loans have good collateral.
Of the Bank of Åland’s Stage impairment
loss provisions, EUR . M is related to a case
in Sweden caused by credit fraud, where the
customers were sentenced to prison terms
for this crime. The Bank of Åland has the requi-
site insurance against crime and has filed a
damage claim with its insurance company.
The insurance company has not completed its
damage investigation.
Profit attributable to shareholders, by segment
EUR M
–5
0
5
10
15
20
25
Corporate &
eliminations
ITPremium BankingPrivate Banking
Impairment losses, EUR M
Loan loss level,
0
1
2
3
4
5
6
20222021202020192018
0.00
0.04
0.08
0.11
0.15
Impairment losses and loan loss level
EUR M
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
20222021202020192018
Balance sheet total
EUR M
Bank of Åland Plc
Annual and sustainability report
The Bank of Åland has no direct exposure to
Ukraine, Belarus or Russia. The direct impact of
the war on the Bank’s credit risk is thus limited.
Rising oil and other energy prices, inflation pres-
sures, rising interest rates/bond yields and falling
share prices may affect the repayment capacity
of customers and the value of pledged collateral.
Liquidity and borrowing
The Bank of Åland’s liquidity reserve in the form
of cash and deposits with central banks,
account balances and investments with other
banks, liquid interest-bearing securities plus
holdings of unencumbered covered bonds
issued by the Bank amounted to EUR , M
on December , (, on December ,
). This was equivalent to () per cent of
total assets and () per cent of lending to
the public.
The Bank of Åland’s balance sheet structure
has changed as a result of the transfer of its
Swedish mortgage banking business to Borgo
AB. Because of this transaction, its funding
structure has changed in such a way that depos-
its from the public now account for a larger pro-
portion of the Bank of Åland’s funding. There
are no longer any Swedish covered bonds.
On December , , the average remain-
ing maturity of the Bank of Åland’s bonds out-
standing was about . (.) years.
The loan/deposit ratio amounted to ()
per cent.
Of the Bank of Åland’s external funding
sources aside from equity capital, deposits from
the public accounted for () per cent and
covered bonds issued accounted for ()
per cent.
The liquidity coverage ratio (LCR) amounted
to () per cent.
The net stable funding ratio (NSFR)
amounted to () per cent.
Rating
On July , Standard & Poor’s Global Ratings
agency raised its credit rating of the Bank of
Åland’s for long-term borrowing from BBB with
a positive outlook to BBB with a stable out-
look. Covered bonds issued by the Bank of
Åland have a credit rating of AAA with a stable
outlook.
Equity and capital adequacy
During the report period, equity capital
changed in the amount of profit for the period,
EUR . M; other comprehensive income, EUR
. M; issuance of new shares as part of the
incentive programme, EUR . M, and the share
savings programme, EUR . M; buy-backs of
the Bank’s own shares, EUR . M; a dividend
of EUR . M distributed to shareholders; and
dividends of EUR . M distributed to holders
of additional Tier (AT) capital instruments.
On December , , equity capital amounted
to EUR . M (. on December , ).
Other comprehensive income was affected
by rising market interest rates and yields,
a weaker Swedish krona and increased market
value of certain strategic shareholdings.
It totalled EUR . M after taxes, divided into
the following balance sheet items. The portion of
the Treasury portfolio that is carried at fair value
via comprehensive income had other compre-
hensive income of EUR . M after taxes.
The structural foreign exchange position in
Swedish kronor, which ensures a common
equity Tier capital ratio with both a numerator
and a denominator in Swedish kronor, had other
comprehensive income of EUR . M after
taxes. A cash flow hedge had other comprehen-
sive income of EUR . M after taxes. AT
instruments in Swedish kronor contributed EUR
. M to other comprehensive income. Strate-
gic shareholdings in Swedish kronor made a net
contribution of EUR . M after taxes to other
comprehensive income.
Defined-benefit pension plans in compli-
ance with IAS benefited from lower pension
liability due to rising market rates and made
a net contribution to other comprehensive
income of EUR . M after taxes.
Common equity Tier capital fell by EUR .
M during to EUR . M (.). At year-
end , there was unutilised permission from
the Finnish Financial Supervisory Authority for
buy-backs of the Bank’s own shares totalling up
to EUR . M. This amount was a fully deduct-
ible item in the capital base (own funds) even
when these buy-backs had not occurred. As of
December , no similar unutilised permis-
sion was in force, since the buy-backs had been
implemented in accordance with this permission.
The risk exposure amount decreased by
per cent during and totalled EUR , M
(,). The risk exposure amount for credit risk
fell by EUR M or per cent. The main reason
was the reduced Swedish mortgage loan port-
folio in the Bank’s balance sheet. Starting in the
first quarter, the standardised . per cent
0
1,000
2,000
3,000
4,000
5,000
20222021202020192018
Lending
EUR M
0
250
500
750
1,000
1,250
1,500
20222021202020182018
Covered bonds
EUR M
0
1,000
2,000
3,000
4,000
5,000
20222021202020192018
Deposits
EUR M
0
50
100
150
200
250
300
350
20222021202020192018
Equity capital
attributable to shareholders
EUR M
Bank of Åland Plc
Annual and sustainability report
upward adjustment in the risk exposure
amount, calculated according to the current IRB
approach while awaiting an updated approach,
was raised to . per cent for the retail portfo-
lio. The operational risk exposure amount rose
by EUR M. A new risk exposure amount of
EUR M was added due to an increased strate-
gic foreign exchange position in Swedish kronor
after the transfer of most of the Swedish mort-
gage loan portfolio to Borgo AB (publ).
The common equity Tier (CET) capital ratio
decreased to . (.) per cent. The Tier (T)
capital ratio was unchanged at . (.) per
cent. The total capital ratio decreased to .
(.) per cent.
In addition to the basic capital requirement,
various buffer requirements apply. These are
mainly imposed by national regulatory authori-
ties. Due to the coronavirus crisis, several of
these buffer requirements have been lowered.
The capital conservation buffer requirement,
. per cent of common equity Tier capital,
applies in all European Union countries. The
countercyclical capital buffer requirement may
vary between and . per cent. For Finnish
exposures, the requirement remains . per
cent. For Swedish exposures the amount of the
countercyclical buffer was raised to . per cent
starting in September . A further increase
to . per cent has been announced in Sweden
starting in June .
The Finnish Financial Supervisory Authority
(FIN-FSA) has also set the buffer requirement
related to Pillar capital adequacy regulations
at . per cent of the Bank’s risk exposure
amount (REA).
• Common equity Tier capital ratio, .
per cent
• Tier capital ratio, . per cent
• Total capital ratio, . per cent
In relation to the above buffer requirements,
the Bank of Åland has an ample capital surplus:
• Common equity Tier capital ratio, .
percentage points
• Tier capital ratio, . percentage points
• Total capital ratio, . percentage points
Effective on January , , Finland’s Finan-
cial Stability Authority has given the Bank of
Åland a formal minimum requirement for eligi-
ble liabilities (MREL) under European Union reg-
ulations, but in practice this does not represent
any extra capital requirement beyond the
already existing minimum requirements related
to the Bank’s total capital ratio and leverage ratio.
Sustainability information
The Bank of Åland applies the Greenhouse Gas
Protocol (GHGP) to estimate and report its green-
house gas emissions. The GHGP is a global stand-
ard for measuring, managing and reporting
greenhouse gas emissions. In addition to carbon
dioxide, it includes six greenhouse gases identi-
fied according to the Kyoto Protocol. Total emis-
sions are measured and reported in tonnes of
carbon dioxide equivalent, CO
e. These emis-
sions are reported in three scopes, where the
Bank of Åland’s climate estimate initially encom-
passes Scope and plus supplier-related
(upstream) emissions from purchases in Scope .
Total emissions from the Bank’s own busi-
ness operations during amounted to
tonnes of carbon dioxide equivalents, which
was an increase of tonnes or per cent
compared to . This increase was primarily
explained by increased business travel.
During , environmentally certified elec-
tricity rose from per cent to per cent of
total purchases compared to . During the
fourth quarter of , environmentally certi-
fied electricity accounted for per cent of
total purchases.
The Bank of Åland paid climate compensa-
tion for estimated emissions from its own busi-
ness operations. Emissions from its own busi-
ness operations are also being supplemented
with information about downstream Scope
emissions, which include the impact from the
loan portfolio, Treasury operations and invest-
ments via the mutual fund subsidiary Ålands-
banken Fondbolag. What is new in in that
estimates were developed for these areas, which
means that a larger share of their emissions is
being reported in compared to prior years.
Employees
The Bank of Åland’s employees are its most
important asset and competitive advantage.
The Bank’s growth strategy implies that its
workforce will increase. In the number of
full-time equivalent positions, re-calculated on
the basis of hours worked, was . This was
full-time equivalents or per cent more than
the previous year and full-time positions or
per cent more than in .
By continuously measuring and monitoring
employee motivation and working conditions,
Lending by economic sector
EUR M
0 500 1 000 1 500 2 000 2 500 3 000
Home mortgage
loans to individuals
Other household purposes
Real estate operations,
Financial and insurance
operations, companies
Housing operations, companies
Maritime shipping, companies
Other companies
Common equity Tier capital ratio
Tier capital ratio
Supplementary capital ratio
0
5
10
15
20
20222021202020192018
Capital ratios
Per cent
Bank of Åland Plc
Annual and sustainability report
0
30
60
90
120
150
180
20222021202020192018
Loan/deposit ratio
Per cent
0
30
60
90
120
150
180
20222021202020192018
Liquidity coverage ratio
Per cent
the Bank of Åland can ensure a healthy and
efficient organisation. The employee com-
mitment score was . (target ). During
, the Bank has focused its efforts,
among other things, on putting in place vari-
ous dynamic work solutions to ensure that it
will continue to be an attractive employer.
The Bank of Åland’s action plan for
equality and diversity places particular
emphasis on ensuring that all employees
enjoy equal rights. Within the Bank’s opera-
tions, creating a culture in which differences
are viewed as an asset is a self-evident goal.
In order to remain competitive in the mar-
ket, the right skills and training are a strate-
gic issue and a long-term investment, and
the Bank continuously invests in skill-
upgrading programmes.
Customers
The Bank of Åland continues to attract new
customers in all its various geographic mar-
kets and through business partnerships. The
number of asset management customers
increased by per cent during the year.
Customer surveys continue to confirm
that our customers appreciate the personal-
ised service we offer. Customer satisfaction
was at a record high and customers were
very willing to recommend us. For the sec-
ond year in a row, the Bank of Åland was
named Finland’s best Private Banking mar-
ket player in Kantar Prospera’s survey.
Social responsibility
Together with its customers, the Bank of
Åland is continuing its commitment to a
cleaner Baltic Sea. This year the Baltic Sea
Project contributed EUR , to various
projects that promote the health of the Bal-
tic Sea. Since the Bank of Åland has
awarded EUR . M to various environmen-
tally related projects.
Aside from paying income and value
added taxes to the Finnish government,
the Bank of Åland is a sizeable employer,
especially in its Åland home market. The
Bank is deeply involved in the Åland com-
munity and contributes to it mainly by
supporting culture, sports and studies.
Dividend
The Board of Directors proposes that the
Annual General Meeting approve payment
of a regular dividend of EUR . per share
for the financial year, equivalent to a
total amount of EUR . M. The dividend is
equivalent to a per cent payout ratio.
The Board also proposes that the AGM
approve payment of an extra dividend of
EUR . per share. This extra dividend is
connected to the final transfer of Swedish
mortgage banking operations to Borgo
during . The total proposed dividend
amounts to EUR 3 1.3 M or EUR2.05
per share.
Important events after close of
report period
As part of the share savings programme,
in January the Bank issued , Series
B shares.
Risk and uncertainties
The single largest risk and uncertainty fac-
tors are Russia’s war of invasion in Ukraine
and the related geopolitical risks, together
with record-high inflation. The conse-
quences of the war and inflation are difficult
to assess.
The Bank of Åland’s earnings are affected
by external changes that the Company itself
cannot control. Among other things, the
Group’s trend of earnings is affected by
macroeconomic changes and changes in
general interest rates and bond yields,
share prices and exchange rates, along
with higher expenses due to regulatory
decisions and directives as well as by the
competitive situation.
The Group aims at achieving operations
with reasonable and carefully considered
risks. The Group is exposed to credit risk,
liquidity risk, market risk, operational risk
and business risk. The Bank does not engage
in trading for its own account.
Since the Bank of Åland has had a
pending case with the Swedish Tax Agency
concerning value-added tax (VAT) for the
financial year . The Tax Agency has
announced a decision on the matter, in
which it states that the Bank of Åland must
pay about EUR . M in VAT. The Bank of
Åland does not agree with the Tax Agency’s
assessment and has appealed the Adminis-
trative Court’s negative ruling of December
. A provision for half the amount was
made earlier as a tax expense in the finan-
cial accounts.
Future outlook
The Bank of Åland expects its net operating
profit in to be significantly better than
in . The Bank is especially dependent
on the performance of the fixed income and
stock markets. There are concerns about
economic developments in a number of
important markets. For this reason, there
is some uncertainty about the Bank’s
current forecast.
Bank of Åland Plc
Annual and sustainability report
Facts on Bank of Åland shares
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Share capital
The share capital of the Bank of Åland is EUR
,,.. The shares are divided into
,, Series A and ,, Series B
shares. Each Series A share represents twenty
() votes at shareholders’ meetings and each
Series B share one () vote. The Articles of
Association stipulate that no representative at
a General Meeting may vote for more than one
fortieth of the number of votes represented at
the Meeting.
In April , the Annual General Meeting
voted to authorise the Board to decide on the
issuance of shares, option rights and other spe-
cial rights entitling their holders to shares, as
provided by the Finnish Companies Act, Chapter
, Section . The authorisation concerns Series
B shares. The total number of shares that may
be issued with the support of the authorisation
may not exceed ,, Series B shares.
The authorisation covers one or more issues in
exchange for payment or without payment and
may also cover divestment of the Company’s
own shares. The authorisation replaces all of
the Annual Meeting’s earlier unutilised authori-
sations of shares, option rights and other spe-
cial rights entitling their holders to shares. The
Board’s mandate is in force until April , .
So far , Series B shares (as of December
, ) have been issued or divested as
authorised, and consequently an additional
,, Series B shares may be issued or
divested on the basis of the authorisation.
Shares as part of variable
compensation programmes
Newly issued or purchased Series B shares in
the Bank are paid as part of the Bank of Åland’s
incentive programmes. In spring , the Bank
disbursed , newly issued Series B shares.
In March , about , newly issued Series
B shares will be disbursed. Another approxi-
mately , Series B shares will be disbursed
as a delayed portion of incentive programmes
during the years –, provided that the
criteria for disbursement are fulfilled. The num-
ber of shares is dependent on the share price on
the disbursement date.
Acquisitions of the Bank’s own shares
On March , , the Annual General Meet-
ing (AGM) authorised the Board of Directors to
decide on acquisitions of the Bank of Åland’s
own Series B shares. The authorisation covers
a maximum of ,, Series B shares and is
in force until the end of the next AGM, but no
later than September , .
On the basis of this authorisation, the Bank of
Åland bought back and annulled , Series B
shares for EUR . million during the year.
The shares are acquired in order to change
the Bank of Åland’s capital structure, to be used
as consideration in acquisitions of companies or
sectoral reorganisations, as part of the Bank of
Åland’s incentive programmes and may other-
wise be transferred onward or kept by the Bank
of Åland. There are thus weighty financial rea-
sons to carry out a targeted acquisition.
Share savings programme
The Bank of Åland launched a new share sav-
ings programme for all Group employees.
Employees can save a maximum of five per cent
of their monthly salary in order to subscribe for
twice-yearly targeted issues of Series B shares.
The savings period began in July . The pro-
gramme will run for one year. Three years after
each respective share issue, the Bank of Åland
will distribute one free matching share for each
share that has been acquired in the targeted
share issues to those who have participated in
the share issues and who are still employed by
the Group and own the shares that were issued.
Employees will be offered the opportunity to
subscribe for Series B shares at a price that is
per cent below the average price during the
calendar month before each respective share
issue. By the end of the application period,
per cent of the number of Group employees had
joined the share savings programme. The sav-
ings amount for those who have joined the pro-
gramme is about EUR . M, which would be
equivalent to about , Series B shares,
based on the average share price in December
including a per cent discount. The num-
ber of matching Series B shares is estimated at
,. The projected number of shares that
employees may receive as part of the share
savings programme is about ,.
As part of the share savings programme,
, Series B shares were issued in
January .
Facts on Bank of Åland shares
Market capitalisation
EUR M
0
100
200
300
400
500
600
20222021202020192018
Earnings per share
euros
0.0
0.5
1.0
1.5
2.0
2.5
3.0
20222021202020192018
Dividend per share
euros
0.0
0.4
0.8
1.2
1.6
2.0
2022
1
2021202020192018
Proposed by the Board of Directors for approval
by the Annual General Meeting.
Bank of Åland Plc
Annual and sustainability report
Changes in share capital
Year Share capital, EUR Series A shares Series B shares
,,. ,, ,,
,,. ,, ,,
,,. ,, ,,
,,. ,, ,,
,,. ,, ,,
Trading in the Bank’s shares
During , the volume of trading in the Bank’s Series A shares on
the Nasdaq Helsinki Oy (Helsinki Stock Exchange) was EUR . M.
Their average price was EUR .. The highest quotation per share
was EUR ., the lowest EUR .. Trading in Series B shares
totalled EUR . M at an average price of EUR .. The highest
quotation was EUR ., the lowest EUR ..
On December , , the number of registered shareholders
was , and they owned ,, shares. There were also a
total of ,, shares registered in the names of nominees. The
number of directly registered shareholders increased by per cent
during .
The ten largest shareholders
Shareholder Series A shares Series B shares Total of shares of votes
Wiklöf Anders and companies ,, ,, ,, . .
Nordea Bank Abp (nominee registered shares) , , , . .
Alandia Försäkring Abp (insurance company) , , , . .
Fennogens Investments S.A. , , , . .
Pensionsförsäkringsaktiebolaget Veritas
(pension insurance company) , , , . .
Chilla Capital , , . .
Lundqvist Ben , , . .
Oy Etra Invest Ab (investment company) , , . .
Svenska Litteratursällskapet i Finland rf (literary society) , , . .
Nordea Life Assurance Finland Ltd , , . .
The above list also includes the shareholder’s Group companies and shareholder-controlled companies.
Shareholders by size of holding
Number of shares
Number of
shareholders
Total number
of shares held
Average
holding
Voting power,
– , , .
–, , ,, .
,–, , ,, , .
,– ,, , .
of which nominee registered shares ,, .
Shareholders by category
Category Number of shares of shares
Private individuals ,, .
Companies ,, .
Financial institutions and insurance companies ,, .
Non-profit organisations , .
Government organisations , .
Foreign investors ,, .
Nominee registered shares ,, .
Total ,, .
Bank of Åland Plc
Annual and sustainability report
Bank of Åland shares traded, Helsinki Stock Exchange
Year Thousands of shares Volume as of shares Price paid, EUR: Highest/Lowest Average price, EUR
A . .–. .
B , . .–. .
A . .–. .
B , . .–. .
A . .–. .
B , . .–. .
A . . –. .
B . .–. .
A . . –. .
B . .–. .
Bank of Åland share data
Number of shares, thousands
, , , , ,
Number of shares after dilution, thousands , , , , ,
Average number of shares, thousands , , , , ,
Earnings per share, EUR
. . . . .
Earnings per share after dilution, EUR . . . . .
Dividend per share, EUR .
. . . .
Extra dividend per share, EUR .
. .
Dividend payout ratio
. . . . .
Extra dividend payout ratio
. . .
Equity capital per share, EUR
. . . . .
Equity capital per share after dilution, EUR . . . . .
Market price per share, closing day, EUR
Series A . . . . .
Series B . . . . .
Price/earnings ratio
Series A . . . . .
Series B . . . . .
Eective dividend yield,
Series A . . . . .
Series B . . . . .
Market capitalisation, EUR M . . . . .
Number of registered
share minus own shares
on closing day
Dividend for the accounting period
Share price on
closing day
Shareholders’ interest in profit
for the accounting period
Earnings per share
Shareholders’ interest in profit
for the accounting period
Shareholders’ portion
of equity capital
Dividend
Average number of shares Number of shares on closing day Share price on closing day
Proposed by the Board of
Directors for approval by the Annual
General Meeting
Bank of Åland Plc
Annual and sustainability report
Financial statements
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Consolidated income statement
(EUR K)
Bank of Åland Group | Jan –Dec , | Jan –Dec , | |
| Note | |||
Interest income | |||
Interest expenses | – | – | |
Net interest income | G | ||
Commission income | |||
Commission expenses | – | – | |
Net commission income | G | ||
IT income | |||
Net income from financial items carried at fair value | G | – | |
Share of income in associated companies | |||
Other operating income | G | ||
Total income | |||
Sta costs | G | – | – |
Other costs | G | – | – |
Statutory fees | G | – | – |
| Depreciation/amortisation and impairment losses | |||
on tangible and intangible assets | G, G | – | – |
Total expenses | – | – | |
Profit before impairment losses | |||
Net impairment loss on financial assets | G | – | – |
Net operating profit | |||
Income taxes | G | – | – |
Net profit for the period | |||
| Attributable to: | |||
Non-controlling interests | |||
Shareholders in Bank of Åland Plc | |||
Earnings per share, EUR | G | ||
Earnings per share after dilution, EUR | G |
Bank of Åland Plc
Annual and sustainability report
Consolidated statement of comprehensive income
(EUR K)
Bank of Åland Group | Jan –Dec , | Jan –Dec , | |
| Note | |||
Profit for the accounting period | |||
| Cash flow hedges | |||
Changes in valuation at fair value | – | ||
| Assets measured via other comprehensive income | |||
Changes in valuation at fair value | – | – | |
Realised changes in value | |||
Transferred to the income statement | – | – | |
| Translation dierences | |||
Gains/losses arising during the period | – | – | |
| Taxes on items that have been or may be reclassified | |||
to the income statement | G | ||
| Items that have been or may be reclassified | |||
to the income statement | – | – | |
Changes in value of equity instruments | – | ||
Translation dierences | – | – | |
Re-measurements of defined benefit pension plans | G | ||
| Taxes on items that may not be reclassified | |||
to the income statement | G | – | – |
| Items that may not be reclassified | |||
to the income statement | |||
Other comprehensive income | – | ||
Total comprehensive income for the period | |||
| Attributable to: | |||
Non-controlling interests | |||
Shareholders in Bank of Åland Plc |
Bank of Åland Plc
Annual and sustainability report
Consolidated balance sheet
(EUR K)
Bank of Åland Group | Dec , | Dec , | |
| Note | |||
| Assets | |||
Cash and deposits with central banks | |||
Debt securities | G | ||
Lending to credit institutions | G | ||
Lending to the public | G | ||
Shares and participations | G | ||
Shares and participations in associated companies | G | ||
| Derivative instruments | G | ||
Intangible assets | G | ||
Tangible assets | G | ||
Investment properties | |||
Current tax assets | |||
Deferred tax assets | G | ||
Other assets | G | ||
Accrued income and prepayments | G | ||
Total assets | |||
| Liabilities | |||
Liabilities to credit institutions | G | ||
Deposits from the public | G | ||
Debt securities issued | G | ||
Derivative instruments | G | ||
Current tax liabilities | |||
Deferred tax liabilities | G | ||
Other liabilities | G | ||
Provisions | G | ||
Accrued expenses and prepaid income | G | ||
Subordinated liabilities | G | ||
Total liabilities | |||
Equity capital and non-controlling interests | G | ||
Share capital | |||
Share premium account | |||
Reserve fund | |||
Hedge reserve | – | - | |
Fair value reserve | |||
Translation dierences | – | – | |
Unrestricted equity capital fund | |||
Retained earnings | |||
Shareholders’ portion of equity capital | |||
Non-controlling interests’ portion of equity capital | |||
Holders of additional Tier capital | |||
Total equity capital | |||
Total liabilities and equity capital |
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Annual and sustainability report
Statement of changes in equity capital
(EUR K)
| Bank of Åland Group | |||||||||||||
| Non- | |||||||||||||
| control- | |||||||||||||
| Un- | Share- | ling | Holders | ||||||||||
| Trans- | restricted | holders’ | interests’ | of addi- | |||||||||
| Share | Fair | lation | equity | portion of | portion | tional | |||||||
| Share | premium | Reserve | Hedge | value | die- | Own | capital | Retained | equity | of equity | Tier | ||
| Equity capital, | capital | account | fund | reserve | reserve | rence | shares | fund | earnings | capital | capital | capital | Total |
Dec , | |||||||||||||
Profit for the period | |||||||||||||
Other comprehensive income | – | – | |||||||||||
Transactions with owners | |||||||||||||
| Additional Tier | |||||||||||||
capital issue | |||||||||||||
| Tier capital | |||||||||||||
instrument dividends | – | – | – | ||||||||||
Dividends paid | – | – | – | ||||||||||
Incentive programme | |||||||||||||
Equity capital, Dec , | – | ||||||||||||
Profit for the period | |||||||||||||
Other comprehensive income | – | – | – | – | – | ||||||||
Transactions with owners | |||||||||||||
Buy-backs of own shares | – | – | – | ||||||||||
Annulment of own shares | – | ||||||||||||
| Tier capital | |||||||||||||
instrument dividends | – | – | – | ||||||||||
Dividends paid | – | – | – | ||||||||||
Incentive programme | |||||||||||||
| Share savings | |||||||||||||
programme | |||||||||||||
Equity capital, Dec , | – | – |
For further disclosures about changes in equity capital, see Note G.
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Annual and sustainability report
Consolidated cash flow statement
(EUR K)
Bank of Åland Group | Jan –Dec , | Jan –Dec , |
| Cash flow from operating activities | ||
| Net operating profit | ||
| Adjustment for net operating profit items not aecting cash flow | ||
| Depreciation/amortisation and impairment losses | ||
| on intangible and tangible assets | ||
| Net impairment losses on financial assets | ||
| Unrealised changes in value | – | |
| Accrued surpluses/deficits on debt securities and bonds issued | ||
| Defined benefit pension plan | ||
| Gains/losses from investment activity | – | – |
| Income taxes paid | – | – |
| Increase () or decrease () in receivables from operating activities | ||
| Debt securities | – | |
Lending to credit institutions | – | |
Lending to the public | – | |
| Other assets | – | – |
| Increase () or decrease (–) in liabilities from operating activities | ||
| Liabilities to credit institutions and central banks | – | |
Deposits from the public | ||
Debt securities issued | – | – |
| Other liabilities | – | – |
| Cash flow from operating activities | – | |
| Cash flow from investing activities | ||
| Investment in shares and participations | – | – |
| Divestment of shares and participations | ||
| Investment in shares of associated companies and subsidiaries | – | |
| Divestment of shares in associated companies and subsidiaries | ||
| Investment in tangible assets | – | – |
| Divestment of tangible assets | ||
| Investment in intangible assets | – | – |
| Cash flow from investing activities | – | – |
| Cash flow from financing activities | ||
| Share issue | ||
| Buy-backs of own shares | – | |
| Issue of additional Tier capital | ||
| Payment of principal on lease liability | – | – |
| Increase in subordinated debentures | ||
| Decrease in subordinated debentures | – | – |
| Dividend paid | – | – |
| Interest paid on Tier capital instruments | – | – |
| Cash flow from financing activities | – | – |
| Exchange rate dierences in cash and cash equivalents | – | – |
| Change in cash and cash equivalents | – | |
| Cash and cash equivalents at beginning of year | ||
| Cash flow from operating activities | – | |
| Cash flow from investing activities | – | – |
| Cash flow from financing activities | – | – |
| Exchange rate dierences in cash and cash equivalents | – | – |
| Cash and cash equivalents at end of year | ||
| Cash and cash equivalents consisted of the following items: | ||
| Cash and deposits with central banks | ||
| Lending to credit institutions that is repayable on demand | ||
| Total cash and cash equivalents |
“Cash and cash equivalents” refers to cash, cheque account with the Bank of Finland, lending to credit institutions that is repayable on demand as well as other lending to
credit institutions and debt securities with an original remaining maturity of less than three months as well as claims on public sector entities that are not lending. “Invest-
ing activities” refers to payments related to tangible and intangible assets as well as holdings of shares and participations aside from shares intended for trading. “Financing
activities” refers to items among equity capital and liabilities that fund operating activities. The analysis was prepared according to the indirect method.
For further information regarding the consolidated cash flow statement, see Note G.
Bank of Åland Plc
Annual and sustainability report
Table of contents,
notes to the consolidated financial statements
G. Corporate information .................................................................
G. Accounting principles...................................................................
G. Segment report .............................................................................
G. Product areas ................................................................................
G. Geographic distribution ...............................................................
G. Net interest income .....................................................................
G. Net commission income .............................................................
G. Net income from financial items carried at fair value ..........
G. Other income .................................................................................
G. Sta costs ........................................................................................
G. Other expenses .............................................................................
G. Statutory fees .................................................................................
G. Expected credit (loan) losses .....................................................
G. Income taxes ..................................................................................
G. Earnings per share ........................................................................
G. Classification of financial assets and liabilities ......................
G. Measurement of financial assets and liabilities
carried at fair value .......................................................................
G
. Assets and liabilities by currency .........................................
G. Holdings of debt securities .........................................................
G. Lending to credit institutions ...................................................
G. Lending to the public .................................................................
G. Shares and participations..........................................................
G. Shares in associated companies..............................................
G. Derivative instruments ..............................................................
G. Intangible assets .........................................................................
G. Tangible assets .............................................................................
G. Deferred tax assets and liabilities ...........................................
G. Other assets .................................................................................
G. Accrued income and prepayments .........................................
G. Liabilities to credit institutions .................................................
G. Deposits from the public ...........................................................
G. Debt securities issued ................................................................
G. Other liabilities ............................................................................
G. Provisions ......................................................................................
G. Accrued expenses and prepaid income ................................
G. Subordinated liabilities ..............................................................
G. Specification of changes in equity capital ............................
G. Cash flow statement, specifications .......................................
G. Group structure ...........................................................................
G. Actively managed assets ...........................................................
G. Assets pledged ............................................................................
G. O-balance sheet obligations ..................................................
G. Pension liabilities ........................................................................
G. Lease liabilities ..........................................................................
G. Disclosures about related parties ...........................................
G. Osetting of financial assets and liabilities ..........................
G. Important events after the close of the
accounting period .......................................................................
Bank of Åland Plc
Annual and sustainability report
A number of new standards and interpretations take ee ke effect for
accounting years that begin after January , y 1, 2023. These coming
regulatory changes are not expected to have any significant eec ffect
on the Group’s financial position, earnings or disclosure.
Notes to the consolidated financial statements
(EUR K)
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Exposure to risk is a natural element of a bank’s operations. The
Bank of Åland has a low risk profile, with a conservative attitude
towards risk and with the aim that all risk shall derive from its nor-
mal business operations. Consequently, its main risks consist of
business risk, credit risk, liquidity risk, market risk and operational
risk. These risks shall be adapted to the risk-bearing capacity of the
Bank. This means that the Bank shall be able to cover losses related
to these risks with its own funds and earnings. The Bank’s low risk
profile is reflected in its low losses related to financial and opera-
tional risks that have arisen over the years.
Table . 1.1. .1
Risk profile by risk category
Risk type Risk profile Risk management
Business risk The Bank’s business risk is generally low. Costs due to
changes in regulations and shifts in technology may
extent than that of other banks, since the Bank is
a small market player.
The Board and Executive Team, as well as their
respective committees, work continuously to identify
and find suitable measures to manage business risk.
Among other things, the Bank has entered into various
partnerships in order to diversify its sources of income
and achieve cost allocation.
Credit risk The Bank of Åland’s prioritised customer category is
private individuals in Åland, on the Finnish mainland
and in Sweden with solid finances and, except in Åland,
geographically limited to major urban areas. In Åland
there is also a Corporate Services unit.
The Board establishes the framework for lending and
credit risk management. The size and risk level determines
the lending decision level, where the Board is the highest
level. Credit risk in day-to-day operations is managed on the
basis of good knowledge of customers as well as analysis of
their repayment capacity and the collateral they provide. For
corporate loan portfolio exposures, the Bank also carries out
a yearly presentation analysing the customer. Credit risk is
also managed through the use of limits established by the
Board. For example, maximum exposure to certain econo-
mic sectors and counterparties is limited. Counterparties
(primarily financial institutions) are managed through an
evaluation process that primarily focuses on the institution’s
credit rating and other relevant key figures, plus risk limits.
Liquidity risk Liquidity risk is a dynamic risk that may change rapidly.
Since the Bank of Åland is a small market player, these
changes may greatly aec ffect its access to liquidity
The Board establishes the framework of liquidity manage-
ment and liquidity risk management. Day-to-day liquidity
management occurs in the Treasury unit. Liquidity risk
is managed primarily by means of a well-diversified
borrowing structure and a liquidity reserve containing
high-quality assets. Liquidity risk is also managed through
the use of limits established by the Board.
Market risk Interest rate risk in the banking book is structural in nature
and is regarded as a significant but manageable risk. Foreign
exchange risk is primarily of a structural nature and mainly
occurs in Swedish kronor via the Bank’s Swedish branch.
The Board establishes the framework of market risk
management. Day-to-day market risk management
occurs in the Treasury unit. Interest rate risks are
managed by using limits for interest rate risk as well
as value change risk, and through the use of derivatives.
Foreign exchange risks are limited primarily by matching
and through limits.
Operational risk The Bank’s operational risks shall relate to its business
operations, and risks shall be avoided and limited to
what is financially justified. The Bank’s risk appetite for
business-critical products, services and IT solutions
is low. No operational risk shall pose a threat to
operations that are subject to permits or threaten
consumer protection for Bank of Åland customers. .
The Board establishes the framework of operational risk
management. Day-to-day operational risk management
occurs primarily in business operations. Operational risks
are managed through yearly selfevaluations, updated
continuity plans, continuity drills, incident reporting,
maintenance of internal regulations and internal
training courses.
Credit risk refers to the risk of losses due to a customer’s inability to
fulfil its obligations towards the Bank and because the collateral that
has been pledged does not cover the Bank’s claim on the customer.
Credit risk in lending activities is a risk that arises naturally in the
banking business. Credit risk also arises in the context of funding
operations in the Bank’s liquidity management.
Credit-related concentration risks in lending activities may arise
from groups of exposures whose default risk exhibits a significant
degree of covariation. The concentration risks relevant to the Bank
are concentration of individual counterparties (name concentra-
tion), concentration of individual sectors (sector concentration)
and concentration within individual countries (geographic
concentration).
The Bank’s overall credit strategy and credit risk appetite are
established by the Bank’s Board of Directors.
Liquidity risk refers to the risk of not being able to meet payment
obligations on the due date because of a lack of liquid assets, or the
risk that the obligations can only be met by obtaining funds at a sig-
nificantly higher cost or by selling positions at a significantly lower
market price than expected. Liquidity risk is a risk that arises natu-
rally from the Bank’s operations.
Bank of Åland Plc
Annual and sustainability report
The Bank endeavours to limit liquidity risk, above all by not being
dependent on sources of funding for its lending other than customer
deposits and covered bonds. To ensure access to liquidity even dur-
ing periods when external borrowing is not possible, the Bank must
have a liquidity reserve as well as a well-diversified structure of
instruments and maturities in its borrowing.
Capital risk refers to the risk that the Bank does not have a satisfac-
tory capital level or structure to cover external requirements and
meanwhile support its business operations under normal or
stressed conditions.
The Bank endeavours to maintain a strong capital position in
relation to its aggregate risk exposure. Its capital requirement is
evaluated at least yearly as part of the Bank’s internal capital and
liquidity evaluation.
Market risk refers to the risk that earnings, equity capital or value
will decrease due to price changes and risk factors in financial
markets. Market risk includes interest rate risk, foreign exchange
risk and equity risk.
Structural risks related to interest rate risk (net interest income
risk and value change risk) unavoidably arise as part of banking
operations. The Bank endeavours to limit most of these risks.
The Group has a structural foreign exchange risk in Swedish
kronor due to its Swedish operations. This risk is managed through
active decisions.
Equity risk refers to the risk of decreases in value due to price
changes in the stock market. The Bank carries out no equity trading
for its own account.
Business risk refers to the risk of lower earnings due to deterioration
in business conditions. Business risk arises naturally in all business
operations and cannot be avoided. The Bank mainly targets its oper-
ations to markets and products that it has worked with previously
and is familiar with.
Operational risk refers to the risk of losses due to inappropriate or
faulty internal processes, human errors, systemic errors or external
events. Legal risks are included in operational risks. Operational risks
occur in all operations. It is thus neither possible nor optimal to elimi-
nate them entirely. The important thing is that risk-taking is deliberate
and suitable actions are taken when the risks that are identified are
too large. What risk level is considered optimal shall be established by
the Board of Directors and constitutes the Bank’s risk appetite.
Board of Directors
Managing Director
Owns and manages
risks
• Business operations
• Support units
Independent meas-
urement, control and
reporting
• Risk Control
• Operational Risks and
Security
• Compliance
Oversight and
evaluation
• Internal Audit
The Board of Directors has overall responsibility for risk manage-
ment and control. The Board defines the risk appetite of the Bank’s
operations and adopts yearly policy documents that specify the
overall principles for risk management as well as restrictions in the
form of limits that operations shall stay within. The Bank’s compli-
ance with risk management principles and its risk positions are
monitored regularly. Limit positions and risk indicators are reported
to the Board at least quarterly. The Board also approves essential
methods and models that are used to measure the Bank’s risks.
The Audit Committee of the Board of Directors assists the Board
in handling its tasks related to oversight of risk management,
methods and models for risk measurement, risk reporting and
internal controls.
The Managing Director is appointed by the Board and shall ensure
that risk management complies with the principles and risk toler-
ances that the Board has approved. The Managing Director does this
by setting guidelines based on the policy documents adopted by the
Board. The Managing Director shall also ensure that the Bank’s
expertise and resources are adapted to its business operations and
that the Bank has sufficient resources and systems for oversight
and monitoring.
The Board of Directors appoints the members of the Group-wide
Executive Team. These members consist of the heads of the Bank’s
business areas and corporate units; they serve as advisors to the
Managing Director. The Managing Director and the other members
of the Executive Team regularly receive reports on the Bank’s limit
positions and risk indicators.
Matters related to certain types of financial risks are handled by
committees consisting of Executive Team members and other
persons appointed by the Managing Director. The Bank’s Asset and
Liability Committee (ALCO) is a decision-making body reporting to
the Managing Director that deals with issues concerning financial
risks, liquidity, funding and capital allocation. The Credit Committee
of the Executive Team makes lending decisions for the Bank on large
loan commitments according to approved credit limits.
In order to create a strong risk culture that permeates the entire
organisation, the risk organisation at the Bank is based on three
lines of defence, which have a clear allocation of responsibility
between risk-takers and oversight units.
First line of defence
The first line of defence consists of the Bank’s business areas,
subsidiaries and Treasury unit plus related support units. They are
each responsible for the risk that arises in their own day-to-day
operations, which means that risk-taking occurs within established
limits and that there are measurement and oversight processes.
Second line of defence
The second line of defence consists of the independent Risk Control,
Operational Risks and Security and Compliance departments, which
all report to the Bank’s Chief Risk Officer (CRO).
Risk Control is responsible for continuously identifying, measur-
ing, analysing, overseeing and reporting the Bank’s financial risks.
This includes regular oversight to ensure that the Bank’s operations
remain within the established risk tolerances and regular reporting
of the Bank’s financial risks to the Executive Team, the Board and
regulatory authorities.
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The objective of operational risk management is to ensure that all
significant operational risks are identified and managed at a suffi-
cient level in relation to the nature and the risk-bearing capacity of
the operations. The Bank endeavours to reduce the probability of
significant unforeseen losses or loss of respect. The Executive Team
and the Board of Directors must be informed regularly about opera-
tional risks associated with Group operations. Adequate operational
risk management is important to ensure trust in the Bank’s operations.
The Operational Risks & Security and Compliance departments
are part of the Bank’s second line of defence. Operational Risks &
Security is responsible for analysing and report the Group’s opera-
tional risks. The Compliance department is responsible for analysing
risks from a compliance standpoint. The second line of defence sup-
ports the Group’s operations, among other things, by means of
internal training and internal regulations related to management of
operational risks and compliance.
The Group has continuity plans for all main processes and central
business units that must function to ensure that the Group and its
customers do not suffer serious consequences. The purpose of
these plans is to maintain operations and to limit interruptions,
losses or damage in the event of disruptions.
Adequate procedures for computer protection and information
security must be in place and must be further developed, based on
the threat situation at hand.
During project work, the Bank uses its new products approval
process (NPAP). Risk mapping is an important part of this process.
The purpose of a comprehensive analysis that highlights a variety of
risks is to avoid inadvertent risk-taking. Products and services that
are new or have undergone significant changes must be secure and
functional when they are put into use.
At the Group level, insurance policies have been obtained to
cover directors and officers, professional liability and crime. In addi-
tion to these insurance policies, Group companies have obtained
company-specific insurance coverage.
6.2 2 m apping of oper ational ris ks
To obtain a complete picture of the Group’s risks, risk mapping and
analyses by all three lines of defence must be taken into account.
The first line of defence maps its own operational risks yearly
through self-evaluation and other methods. Self-evaluations assess
the probability and consequences if one or more operational risks
should materialise. Risks that the second line of defence deems high
or unacceptable are presented to the Group’s Executive Team to
ensure that sufficient steps are taken in order not to exceed the
Group’s risk appetite. Action plans are followed up continuously.
At least once a year, AML-CFT (Anti Money Laundering –
Combating the Financing of Terrorism) risk analyses take place.
The results are reported to the Executive Team and the Board.
The second line of defence regularly carries out its own risk
assessments in such areas as information security risks, compliance
and mapping the Bank’s operational risks.
6.3 3 import ant ope rational risks
Operational risk areas that have been identified and assessed as
important are mainly connected to manual processes and insuffi-
cient systems support, risk of fraud and suspicious transactions,
risks connected to third parties and compliance risks.
systems support
The demands placed on banks by external regulations lead to a
growing need for IT systems that support increasingly complex
processes. From an operational risk standpoint, more complex pro-
cesses with many manual work stages mean higher risk, especially
in combination with growing operations. To decrease risks, IT deliv-
eries and the pace of development need to be in balance.
The risk of fraud and suspicious transactions is attributable to the
external threats posed by financial crime that the financial services
sector is exposed to. A growing amount of criminal activity occurs
on the internet, often harming the Bank’s customers directly. But
banks have a broad obligation to compensate fraud victims, which
can result in heavy costs even though the fraud is not aimed at the
bank. Fraud may take such forms as phishing, false invoices, invest-
ment fraud or romance scams.
Every day numerous transactions flow through banks’ payments
systems, which means a risk that criminal transactions will also be
initiated. Continuous systems-based procedures are employed to
identify suspicious transactions. The Bank regularly provides train-
ing to its employees to raise awareness of suspicious transactions
and how to deal with and investigate them. There are dedicated
employees in the first and second lines of defence who provide
operational back-up in dealing with suspicious transactions as well
as combating money laundering and financing of terrorism.
The financial services sector is continually undergoing major
changes due to technological advances. These changes tend to lead
to third party contracting of processes and activities. Third party
contracting refers to situations in which the Bank has signed a con-
tract with a supplier to perform a process, service or other activity –
often related to information technology solutions.
Third party risks are risks that a company may be exposed to as
a result of a contract with another party. Responsibility for services
and risks connected to the Bank’s own operations can never be
assigned to another party. To limit third party risks, it is important to
apply a thorough approval process in connection with the signing of
new contracts and that new and existing suppliers are adequately
vetted and followed up.
The Bank has established a special committee for managing
third party contracting matters.
The Bank is subject to numerous regulations that make far-reaching
demands on its operations. Compliance shortcomings create a risk
that the Bank will not live up to external laws and regulations. Failure
to manage compliance risks may lead to increased operational and
legal risks, reputational risks and the risk of intervention by regula-
tory authorities.
At least once a year, the Compliance department carries out an
analysis of compliance risks, consisting of identifying and evaluating
risks and proposing actions to limit and manage risks that are
deemed high or unacceptable.
Internal risk-mapping must always include compliance risks.
Bank of Åland Plc
Annual and sustainability report
Climate-related risks are not a separate risk area, but rather one that
cuts across categories and can amplify the risks in already estab-
lished risk areas. Climate-related risks therefore require the expan-
sion of the existing risk management framework to address the
emerging risk drivers resulting from climate change. Climate-related
risks can be divided into different categories, such as physical risks,
transition risks related to measures that mitigate climate change and
liability risk.
Physical risks refer to the direct effects of climate events. Physical
risks may be acute: in the form of individual extreme weather events
such as floods, storms or forest fires that may damage buildings and
infrastructure or disrupt production and supply chains. Borrowers
affected by an extreme weather event may suffer financial loss due
to damaged property or loss of income. Physical risks may also be
terns, higher average temperatures or rising sea levels.
Transition risk refers to risks stemming from actions taken to
achieve a transition to a sustainable economy. Such a transition may
also cause assets to depreciate before the end of their expected ser-
vice life and consequently need to be written down. Such assets are
commonly referred to as stranded assets. Generally speaking, mar-
ket players whose activities are climate-damaging can be assumed
to have higher transition risk. Those that can quickly transition to
sustainable production may benefit financially, while others are
punished for not being able to transition as quickly.
Climate change may also generate liability risk, when someone
who has suffered losses due to climate change tries to recover these
losses from others they believe may have been responsible, for
example through lawsuits or insurance claims.
Forecasts of when climate-related risks might materialise vary
between different actors. Transition risks may materialise relatively
soon, especially if the world is to succeed in meeting the existing
climate targets, while the risk of climate change will be more
significant if the transition to a sustainable economy has not been
sufficiently rigorous.
Credit risk
Climate change may create credit risk by causing borrowers to suffer
losses that make them unable to fulfil their loan obligations. This
may include damage to property, loss of income or a reduction in
the value of investments due to climate-related market risk. Climate
change may also trigger credit concentration risks, since certain
geographic areas or economic sectors may be hit harder by extreme
weather events.
More than half of the Bank’s lending consists of residential mort-
gage loans to individuals. The main risk factors in this segment relate
to the real estate that is used as collateral for the loans. These prop-
erties may be damaged during extreme weather events. Real estate
collateral may also decrease in value because its location is espe-
cially vulnerable to rising sea levels, which may result in a loss for
the Bank if the customer defaults and the collateral must be sold.
The market value of properties may also be affected by their energy
performance. Poorer energy performance may lead to costs for
modernisation or higher energy and heating costs.
The Bank’s corporate lending is allocated across different eco-
nomic sectors and is mainly concentrated among market players in
Åland, on the Finnish mainland and in Sweden. The sectoral codes
used in official statistics are inexact, making it hard to assess the risk
exposure of companies on the basis of these codes alone. Compa-
nies also make different choices about their business investments
and supply chains, which means they may be more exposed or less
exposed to climate-related risks compared to other market players.
A large proportion of risk exposure may be found elsewhere in the
supply chain, for example in factories and during transport from
developing countries.
In the construction sector and in urban planning, adaptations are
needed to mitigate climate risks and reduce the vulnerability of
buildings and other facilities to heat waves, increased rainfall, flood-
ing or landslides. The construction sector is already subject to more
stringent laws on sustainability measures, such as climate declara-
tion requirements for new buildings, energy conservation and
at-source sorting of construction and demolition waste.
How the wholesale and retail trade and the manufacturing sec-
tor will be affected by climate risks will depend on what they sell or
produce and what methods they use. The availability of imported
goods or inputs may be subject to greater uncertainty as other parts
of the world are affected by extreme weather events. Price varia-
tions may also widen as disruptions become more frequent.
The transition to fossil-free goods may cause demand for some
products to fall drastically, making some business models directly
unprofitable.
Agriculture, forestry and fishing are sectors that will be directly
affected by extreme weather and climate change. Flooding,
droughts, forest fires and storms may have serious consequences.
In agriculture, adaptation measures are needed to reduce the risk
of extreme weather events or pests destroying entire harvests.
Depleted fish stocks in the Baltic Sea will inevitably affect com-
mercial fishing.
Tourism and leisure industry operators may benefit to some
extent from a warmer climate including more heat waves in south-
ern and central Europe, since this may increase summer tourism in
the Nordic region. At the same time, companies offering winter
sports activities may suffer from shorter or less snowy winters.
Service sectors will presumably be less affected by climate
change. One potential problem might be that buildings or facilities
are located where they are relatively often affected by heat waves or
cold spells.
In the financial and insurance sector, damage resulting from
the climate-related risks of borrowers or policyholders may lead to
losses. As emission-heavy business models become economically
unprofitable, investors may be forced to write down their holdings.
Stranded fossil assets such as oil, coal, gas and all the infrastruc-
ture built to extract these natural resources would affect a range
of economic actors and potentially the entire world economy and
financial stability.
Market risk
As climate events occur with greater frequency and severity, market
risks will be affected. If the market believes that climate policy
taken, this may impact share prices of companies that are expected
to be affected. The price picture may also be affected as rating
agencies consider more climate risk factors in their assessments.
Since the Bank of Åland does not engage in equity trading for its
own account, its equity risk is very limited, consisting mainly of stra-
tegic holdings in financial services companies that are deemed to
have limited exposure to climate-related risks.
Climate change and the measures taken to counteract it gener-
ate risks that may jeopardise economic development, price stability
and financial stability. Extreme weather events risk worsening the
production opportunities of businesses and human well-being. From
a monetary policy perspective, this may increase the volatility of
prices and output. How inflation will be affected depends, among
other things, on monetary policy considerations.
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
The purpose of the internal capital adequacy assessment process
(ICAAP) is to analyse all risks in the Group’s operations and bas AP) is to analyse all risks in the Group’s operations and − based
on the results estimate the capit s − estimate the capital requirement to ensure that the
Group is sufficiently capitalised to cover all its risks, enabling it to
conduct and develop its operations both under normal and sharply
worsened business conditions. In this process, the Bank assesses
the capital needed for risks not covered under Pillar s not covered under Pillar 1. Examples of
such risks are concentration risk, pension liability risk, business risk
and interest rate risk in the banking book.
based on the recession scenario published by the EBA early in he recession scenario published by the EBA early in 202, 1,
the economic outlook, the Bank’s own estimates and information
published by the Finnish Finance Ministry, the central banks of
Finland and Sweden as well as various economic forecasters. In
keeping with practice, the negative scenario is based on unchanged
business volumes.
The identified additional capital requirement beyond Pillar r 1
risks in the loan portfolio, credit risk and equity risk beyond Pillar . redit risk and equity risk beyond Pillar 1.
In its capital requirement estimate, the Bank has included the Pillar
cess, since this is higher than the Bank’s internally estimated capital
requirement according to ICAAP and binding regulatory require-
ments for the Bank. Capital planning for a possible economic down-
turn showed that capital ratios remain at high levels throughout the
stress period.
The Bank’s capital requirement on December ’s capital requirement on December 3, in tota 1, 2021 in total
which FIN-FSA estimates should be . percent star A estimates should be 1.0 percent starting on Septem-
requirement according to Pillar o Pillar 1, EUR R 49. M represented th .6 M represented the com-
bined buffer requirement and EUR fer requirement and EUR 19. M consisted of the Pillar .8 M consisted of the Pillar 2
capital requirement estimated by FIN-FSA.
The purpose of ICAAP is to ensure that the existing liquidity buff-
ers are sufficient to safeguard disruption-free operations even dur-
ing periods of stress. This is achieved by using stress tests featuring
various scenarios, aimed at assessing what impact these will have
on the Bank’s liquidity supply and its borrowing needs.
At regular intervals, at least once a year, the Bank carries out
a review of the scenarios it will use in identifying, measuring and
managing liquidity risks. This is based on factors identified by the
Bank that are expected to have a major impact on its liquidity risk.
Examples of such factors are deposits, the collateral pool for cov-
ered bonds and liquid assets.
(ILAAP) shows that from a liquidity perspective, the Bank can han-
dle stressed scenarios that are specific to the Bank (idiosyncratic
stress), general market stress and scenarios that combine these.
This low liquidity risk is a result of the funding profile the Bank has
chosen as well as its high-quality liquidity reserve.
published its recommendation on finalising Basel III, its revised
international capital adequacy standard. In October tober 2, the Euro 021, the Euro-
pean Commission unveiled a proposal for amendments and updates
to the EU’s capital adequacy regulations for credit institutions. These
include amendments to both the Capital Requirements Regulation
and Directive. The Commission’s s 2 B 021 Banking Package also
includes updates to the EU’s Bank Recovery and Resolution Direc-
tive, which prescribes crisis management rules for banks. These
amendments will complete the implementation of Basel III in the
EU countries.
The Commission proposes January , a y 1, 2025 as the starting date
for most of the above reforms, with a gradual phase-in of certain
amendments over a five-year period.
The amendments establish a floor for risk-weighted assets (out-
put floor) that limit the ability of banks to lower their capital require-
ments by using internal models. The purpose is to narrow the exces-
sive variations that occur among risk-weighted assets at banks that
use internal models. The floor rule means that risk-weighted assets
calculated on the basis of internal models will be limited to at least
using standardised approaches, once the rule is phased in com-
pletely. The standardised approach for credit risk would also be
made more risk-sensitive, for example in the case of retail exposures
and real estate lending. A new standardised approach has been pro-
posed for operational risks, while the option of using internal mod-
els for operational risks would be eliminated.
The package also includes rules on managing and monitoring
ESG risks in line with the EU’s sustainable development strategy.
It would require banks to systematically identify, publicise and man-
age ESG risks as part of their risk management. This includes recur-
rent climate stress testing, conducted by both regulatory authorities
and banks. The proposed measures would not only make the bank-
ing sector more resilient but also ensure that it takes sustainability
issues into account. It is also expected that new regulations regard-
ing ESG risks will be introduced, which may have an impact on
banks’ capital requirements.
The Bank of Åland’s combined buffer requirement will increase
when countercyclical buffer percentages in Sweden, Norway,
authority in Finland is preparing to introduce a systemic risk buffer
expected to be in force for months af ted to be in force for 12 months after it is communicated.
In the Bank of Åland’s Pillar repor llar 3 report, the Bank reports on the disclo-
sure requirements laid down in Part Eight of the Capital Require-
ments Regulation (EU) No / gulation (EU) No 575/2 and subsequent amendment 013 and subsequent amendments.
The report provided further information on the Group’s financial
risks and is available on the Bank’s website.
Bank of Åland Plc
Annual and sustainability report
Private
Banking
Premium
Banking IT
Corporate
and other Eliminations Total
Net interest income 3 2, 74 2 3 1, ,18 3 – –12 4, 3 17 – 13 6 8, 2 17
Net commission income , 55, 531 18, 0 7 2 – 65 , 4, 423 470 78, 4 32
IT income 0 0 , 43,559 205 – –2 0, 2 72 , 23, 4 92
Net income from financial items
carried at fair value 2, 9 15 , 5,4 4 8 – –23 5 4, 74 6 – –58 1 2, 8 15
Other income 74 10 , 1,0 9 2 1, ,567 –, –1, 5 7 7 , 1,1 6 6
Total income t, 1, 26 5 , 54, 71 2 2 2, ,33 t 15, 5 5 4 – –2, 1, 2 5 8 18 2, ,1 5 5
Other expenses – –10, 2 5 7 –, –3, 9 76 – 1, 7, 1 8 9 – –2 5, 6 6 1 1, 7, 3 7 7 – –3, 9,7 0 6
Statutory fees –, –1, 4 5 6 –, –1,7 19 0 – –2 6 6 0 –, –3, 4 4 0
Depreciation/amortisation – –2, 5 47 – –2 0 2 –, –3, 4 92 –, 9,28 6 2, 3 13 – 13, 2 1 4
Internal allocation of expenses – –2 4, 9 4 4 – –2 2, ,111 0 4, 7, 0 5 5 0 0
Total expenses –, –59,307 –, 34,81 s – –4, 5, 165 – –12, 5 5 5 19, s t 8 – –131, 4 5 1
Profit before impairment losses , 31, t 5 2 19, 4 t 4 – –827 , 3,033 –, –1, 7 s 8 5, 2,2 99
Net impairment losses on financial assets –, 7, 4 8 5 , 1, 3 9 1 0 – 112 0 –, 6, 205
Net operating profit 24, 470 , 21, 5 4 t – 827 5, ,921 –, –1, 7 s 8 , 46,09 1
Income taxes –, –5,016 – –4, ,3 43 2 18 – –172 0 – 9, 3 14
Non-controlling interests 0 0 – –1 0 0 – –1
Profit for the period attributable to
shareholders in Bank of ÅlandPlc land Plc 19, 2 5 1 16, t 2 7 – s 10 5, 56 4 – –1, 7 s 8 1 s, ,778
Net commission income
Deposits 16 7 , 1, 0 10 0 2 62 0 , 1, 4 4 0
Lending 964 , 2,398 0 68 – –2 , 3, 42 9
Payment intermediation , 1,6 4 8 , 7, 0 8 4 0 3, ,14 9 0 , 11, 8 8 2
Mutual fund commissions 60, 245 , 5,8 85 0 9 61 – 6, 6 14 6 0, 477
Asset management commissions 15, 4 10 , 1, 4 0 9 0 – –8 – –18 0 16, 63 0
Securities brokerage , 11, 0 8 5 976 0 , 1, 0 6 3 0 13, ,12 5
Other commissions 266 , 2,47 8 0 1, ,680 – –37 4, ,387
Total commission income , 89,785 , 21, 5 2 8 8 , 7, 17 4 –, 6, 833 111, 1 7 8
Commission expenses – –3 4, 2 55 – –3, ,1 6 8 – 65 – –2, ,7 5 4 , 7, 3 0 3 – –32, ,93 8
Total net commission income 55, 531 18, 8 72 – se , 4, 423 470 78, 432
Business volume, December mber 3 1
Lending to the public ,, 1,898,0 35 1,, ,994,5 1 1 0 4 12, 0 1 6 –, –1, 6 2 6 4, 30, 2, 937
Deposits from the public , 2, 0 0 6, 633 2, ,0, 63,007 0 12 9, 4 18 – –16, 9 9 1 , 4, 1, 82, 0 68
Actively managed assets 7,, 943, 825 6 8 3, 9 74 0 , 9,578 0 , 8, 637, ,37 7
Managed mortgage loans 0 0 0 1,, ,303,508 0 1,, ,303,508
Risk exposure amount 758, 2 29 5 0 6, 74 2 7, 5, 000 5 9 8, ,10 5 0 , 1, 9 3 8, 0 7 7
Equity capital 10 8, 0 3 8 76, ,7 0 8 , 25, 879 , 105,820 316, 4 4 6
Financial ratios etc.
Return on equity (ROE), ), % 18. 3 . 21. 7 –. 2.3 . 3.6 12. 8
Expense/income ratio . 0.65 . 0.64 . 1. 02 . 0.8 0 . 0.7 2
Bank of Åland Plc
Annual and sustainability report
Private
Banking
Premium
Banking IT
Corporate
and other Eliminations Total
Net interest income 2, 7, 9 9 1 , 28, 26 8 – –2 , 5,9 81 – –8 , 62, 229
Net commission income , 58,582 16, 9 0 9 – –7 5 , 3, 343 286 , 79,0 4 4
IT income 0 0 42, ,817 340 – –1 8, 74 9 24, 4 07
Net income from financial items
carried at fair value 12 – –2 8 – –74 7 327 – –5 – –4 42
Other income 681 11 937 10, 36 4 –, –1, 2 0 9 10, 78 5
Total income 4, 7, 5 s 7 2 5, ,16 6 , 42, t 07 20, 375 – –19, s 4 5 17 s, 8 5 2
Other expenses – 8, ,13 7 –, –3,75 8 – –16, 2 0 4 – –2 1, ,13 1 15, 4 4 5 – –33, ,7 8 6
Statutory fees –, –1,1 8 9 –, –1, 4 7 0 0 – –98 0 – –2, 75 7
Depreciation/amortisation – –2, 8 2 8 – –3 6 4 –, –3, 251 –, –11,2 0 6 , 3,387 – –14, 2 6 2
Internal allocation of expenses – –24, 0 7 2 – –21, 2 61 0 4, 5, 333 0 0
Total expenses –, –54,5 38 – –33, ,7 10 –, –42, 395 –, –10,109 18, 4 1 5 – –1, 21,92 8
Profit before impairment losses , 32,72 t 11, 2 5 8 5 13 10, 5 s s – –854 , 54, 6 04
Net impairment losses on financial assets –, –4,89 8 103 0 – 11 0 0 –, 4,9 06
Net operating profit 5, 7, 4 1 6 11, 5 5 1 5 13 6 8, ,1 5 5 – –854 2 t, ,19 4
Income taxes –, –5,7 22 –, 2,367 – 3 13 – –946 0 –, 9,3 4 8
Non-controlling interests 0 0 – –2 0 0 – –2
Profit for the period attributable to
shareholders in Bank of ÅlandPlc land Plc 5 5, ,1 8 t t, ,1 4 5 198 , 9,2 8 t – –854 , 39,8 49
Net commission income
Deposits 113 8 11 0 255 0 1, ,1 7 9
Lending 576 1, 74 3 0 76 – –2 , 2,39 4
Payment intermediation , 1, 6 5 3 , 6,35 5 0 , 3, 245 0 , 11, 2 5 3
Mutual fund commissions , 59,4 6 7 , 5, 682 0 927 –, 6,381 , 59,69 4
Asset management commissions 1 4, 74 6 , 1, 2 5 7 0 31 – –14 9 15, 8 8 5
Securities brokerage 13, 9 3 5 , 1, 3 0 5 0 , 1, 24 9 0 , 16,489
Other commissions 388 , 2,64 6 0 505 – –56 , 3, 4 82
Total commission income , 90,877 19, ,7 t t 8 , 6, 288 –, –6,58 4 110, 1 7 s
Commission expenses – –3, 2, 29 5 – –2, 8 9 0 – –75 – –2, 9 4 5 6, 8 74 –, –31,332
Total net commission income , 58,582 16, t 8 t – –7 5 , 3, 343 28 s , 79,0 2 2
Business volume, December mber 3 1
Lending to the public 1,, ,966,2 32 , 2, 3 19, 5 7 0 0 502, ,3 4 8 – –3 0 5 4, 7 8, 7, 8 4 5
Deposits from the public , 1, 9 6 0, 2 0 5 , 2,0 6, 4, 4 82 0 , 64, 290 – 18, 8 6 5 4, 0 7 0, ,112
Actively managed assets 9, ,1 4 4, 5 3 2 6 7 0, ,15 2 0 10, 97 5 0 ,, 9,825,659
Managed mortgage loans 0 0 0 2, ,000 0 2, ,000
Risk exposure amount , 752,967 5 8 2, 0 14 7, 5, 000 5 6 6, ,17 5 0 , 1, 9 7 6, ,15 6
Equity capital , 82, 265 8, 8,347 2, 7, 7 4 7 13 3, 5 5 9 33, 1, 9 18
Financial ratios etc.
Return on equity (ROE), ), % . 25. 2 . 9. 9 0. .7 11. 7 14. 0
Expense/income ratio . 0.62 0. .75 , 0,99 . 0. 50 . 0.69
The Bank of Åland Group reports operating segments in compliance with IFRS , wh S 8, which means that operating segments reflect the information that the Group’s Executive
Team receives.
“Private Banking” encompasses Private Banking operations in Åland, on the Finnish mainland and in Sweden, as well as asset management (Ålandsbanken Fondbolag Ab and
its ten wholly owned subsidiaries). “Premium Banking” encompasses operations in all customer segments excluding Private Banking in Åland, on the Finnish mainland and in
Sweden, as well as asset management. “IT” encompasses the subsidiary Crosskey Banking Solutions Ab Ltd including S-Crosskey Ab. “Corporate and Other” encompasses all
central corporate units in the Group, including Treasury and partnerships.
Bank of Åland Plc
Annual and sustainability report
Daily banking
services
incl. deposits
Financing
services
Investment
services IT services Other Total
Net interest income , 19, 9 0 4 4, 7, 6 0 0 0 – –15 6 870 6 8, 2 17
Net commission income , 11, 2 6 3 4, ,93 3 , 62,28 6 – –65 15 7, 8, 4 32
IT income 0 0 0 23, 492 0 23, 492
Net income from financial items carried at fair value 0 , 11, 3 10 0 – –2 3 5 , 1, 74 0 12, 8 15
Other income 0 0 0 0 , 1,1 6 6 , 1,1 6 6
Total income 1 6, ,1 s 7 , 63,8 62 , 62,28 s , 23, 035 , 3,791 6 4 2, ,1 5 5
Daily banking
services
incl. deposits
Financing
services
Investment
services IT services Other Total
Net interest income , 5, 8 47 , 54,699 0 – –7 9 , 1,76 2 , 62,229
Net commission income 10, ,7 82 , 2,961 , 65, 35 0 – –75 28 , 79,0 4 4
IT income 0 0 0 24, 4 07 0 24, 4 07
Net income from financial items carried at fair value 0 – –2 7 0 – –74 7 333 – 4 42
Other income 0 0 0 0 10, ,7 8 5 10, 7 85
Total income 16, s 5 t 5, 7, s 1 1 , 65,35 8 , 23, 50 s 12, t 8 7 17 s, 8 5 2
Daily banking services included net interest income from all deposit accounts, i.e. also savings accounts, time deposits and cash accounts connected to securities accounts,
net commission income from deposits, cashier and payment intermediate services, cards, the Premium concept, bank safety deposit boxes etc. plus income from
exchanging currencies.
Financing services consisted of net interest income from all lending products, i.e. also securities account loans, as well as lending commissions and guarantee commissions.
Investment services included income from discretionary asset management, advisory asset management, mutual fund management and securities brokerage. Income from
deposit accounts and loans that may be part of a customer’s asset management were reported under daily banking services and financing services, respectively.
IT services included the operations of Crosskey Banking Solutions Ab Ltd.
Finland Sweden Total Finland Sweden Total
Net interest income 3, 9,785 , 28, 4 32 6 8, 2 17 , 35,05 1 2, 7, 1 7 8 , 62, 229
Net commission income , 59, 079 19, 35 3 78, 432 , 60, 404 1, 8, 640 , 79,0 4 4
Net income from financial items carried at fair value 15, 3 6 3 8, ,12 8 , 23, 492 1, 7, 4 9 9 , 6,9 08 , 24, 4 07
IT income –, –1,74 4 14, 5 59 12, 8 15 –, 5, 631 5, ,1 8 9 – 4 42
Other income , 1, 0 5 8 10 8 1, ,16 6 10, 6 7 7 10 8 , 10,7 8 5
Total income 113, 5 2 5 , 70, 58 8 6 4 2, ,1 5 5 12 2, t 5 t 5, 1, 8 t 5 176, 8 5 2
Other expenses – –23, 7 93 – –19, 3 5 4 –, 43, 146 – –1 7, ,369 – –1 9, 174 – –3 6, 5 43
Depreciation/amortisation –, 13,979 765 – 13, 2 1 4 – –12, 2 0 5 –, –2,057 – 14, 2 62
Total expenses – t, 4,72 t – 1, 7, 8 t 2 – –13 6, 4 5 1 –, –82, 505 – 1 t, 2 15 –, 121,920
Profit before impairment losses 6 4, 4 12 , 33, 2 4 s 52, ,299 , 42, 424 6 6, ,680 , 54, 6 04
Net impairment losses on financial assets – –92 9 –, –5,27 7 –, 6, 205 – –2, 2 2 9 – –2, 6 7 7 – –4, ,90 6
Net operating profit
Income taxes
Non-controlling interests
Profit for the period attributable to
shareholders in Bank of Åland Plc
Business volume, December mber 3 1
Lending to the public ,, 2,871,452 , 1, 4 3, 1, 4 8 4 4, 30, 2, 937 2, 8 9, 1, 6 9 6 ,, 1,896, 14 9 4, 7 8, 7, 8 4 5
Deposits from the public , 2,82, 9,38 6 , 1, 3 5, 2, 6 8 2 , 4, 1 82, ,068 2, 9 1 8, ,14 3 , 1,1 5, 1, 9 6 8 4, 0 7 0, ,112
Actively managed assets , 4,803, ,69 3 , 3,8, 33,685 8, ,637, 377 5, 0 4 1, 74 4 ,, 4,783,91 5 ,, 9,825,659
Risk exposure amount , 1, 2 2 0, ,1 4 1 71 7, ,936 , 1, 93 8, 0 7 7 1,, 122,9 26 8, 53, 23 0 , 1, 9 7 6, ,15 6
Allocated equity capital , 229,586 8, 6,857 3 16, 4 4 3 , 252, 34 4 , 79, 572 3 3, 1, 9 16
Financial ratios etc.
Return on equity (ROE), ), % . 6.8 28. .7 12. 8 15. 0 10. 6 14. 0
Expense/income ratio . 0.83 0. 53 . 0.7 2 . 0.66 0. .7 7 . 0.69
Bank of Åland Plc
Annual and sustainability report
Deposits , 1, 4 4 0 , 1,1 7 9
Lending , 3,42 9 , 2,39 4
Payment intermediation 11, 8 8 2 , 11, 2 5 3
Mutual fund commissions 6, 0, 47 7 , 59, 69 4
Asset management commissions 16, 6 3 0 15, 8 8 5
Securities brokerage 13, ,1 2 5 1, 6, 489
Legal services 673 737
Guarantee commissions 302 567
Other commissions , 3,4 81 , 2, 238
Total commission income , 111, 2 1 4 6 6, 0,436
Payment commission expenses – 4, ,1 8 3 –, –3,9 31
Mutual fund commission expenses – –24, 6 5 0 – –22, 72 4
Asset management commission expenses –, –1, 127 –, –1, 0 15
Securities brokerage commission expenses – –2, 2 41 –, –3, 0 51
Other commission expenses – –806 – 671
Total commission expenses – –33, ,0 8 s –, –31, 1 t 6
Net commission income , 78, 2 15 , 79,0 2 2
Bank of Åland Plc
Annual and sustainability report
Realised Unrealised Total Realised Unrealised Total
Valuation category fair value via the
income statement (“profit and loss”)
Derivative instruments 0 – –7 – –7 728 23 751
Other financial items – –149 , 1, 8 17 , 1,6 6 9 – 662 –, –1, 4 3 0 – –2, 0 9 2
Valuation category fair value via the
income statement (“profit and loss”) – –14 t , 1, 4 10 , 1,6 s 6 66 – –1, 2 8 7 –, –1, 1 2 6
Valuation category fair value via other
comprehensive income
Realised changes in value 1, ,587 1, ,587 551 551
Expected loan losses – 69 – 69 224 224
Total, valuation category fair value via other
comprehensive income , 1, 5 4 7 – –69 6, 5 18 5 51 224 7 75
Hedge accounting
of which hedging instruments 79 – –3, 8 81 –, –3, 8 03 –, –1, 2 9 8 – –2, 8 35 – 4, ,1 3 3
of which hedged item 0 4, ,4 67 , 4, 467 , 1, 4 43 , 2, 86 0 4, ,3 03
Hedge accounting 79 585 664 14 5 25 17 8
Valuation category accrued cost
Loans 9, 5 19 – 18 , 9,5 01 0 – –2 7 – –27
Debt securities 63 63 2 02 202
Total, valuation category accrued cost , 9,5 82 – –1 4 , 9,5 s 2 5 02 – –27 6 56
Foreign currency revaluation 8 – –593 – –593 8 – –2 5 8 – –2 5 8
Total , 11, 8 t t , 1,7 16 12, 4 15 964 – –1, 2 8 s – –4 60
Income from equity capital investments 38 81
Income in conjunction with transfer of assets , 6, 263
Net income from investment properties 4 102
Rental income on properties 79 63
Miscellaneous income 500 , 3,7 45
Total 622 , 10, 5 5 2
Specification of net income
from investment properties
Rental income 20 27
Capital gains 95
Other income 1
Other expenses – 16 – –2 1
Total 2 10 5
Salaries and fees , 58,381 5 4, 9 15
Compensation in the form of shares
in Bank of Åland Plc 305 666
Pension expenses 10, 28 5 9, ,14 1
Other social security expenses , 6, 492 , 6,39 2
Total , 75, 2 s 1 7 6, ,115
of which variable sta cost taff costs , 3, 30 8 , 3,8 05
Variable sta co aff costs and sta out ff outplacement expenses are reported including social insurance fees.
Salaries and fees
Boards of Directors 3 97 3 45
Senior executives , 3,052 3, 417
Others , 55, 236 , 51, 8 2 0
Total
“Boards of Directors” refers to all Board members of Group companies. “Senior executives” refers to the Group’s Executive Team and to the Managing Director and Deputy
Managing Directors of subsidiaries.
Bank of Åland Plc
Annual and sustainability report
Salaries and fees to senior executives
Salaries and fees , 2,79 4 , 2,8 62
Share-based payment 258 555
Total , 3,0 52 1, 2 17
Pension expenses
Managing Director 85 89
Senior executives 458 530
Others 9, 74 2 8, ,523
Total 10, 28 5 t, ,1 2 6
Pension expenses
Defined benefit plan 784 864
Defined contribution plan , 9,5 0 0 , 8,27 7
Total 10, 28 5 t, ,1 2 6
Hours worked, recalculated to full-time
equivalent positions
Bank of Åland Plc 499 481
Crosskey Banking Solutions Ab Ltd 317 298
Ålandsbanken Fondbolag Ab 37 35
Total number of positions,
recalculated from hours worked 854 4 15
Men Women Men Women
Gender breakdown, own, %
Board of Directors 57 43 67 33
Senior executives
“Board of Directors” refers to the Board of the Bank of Åland Plc.
Managing
Director
Senior
executives
Other
risk-takers Others
Managing
Director
Senior
executives
Other
risk-takers Others
Total compensation
Fixed compensation earned 385 , 2,0 0 9 , 1, 3 93 5 2, ,18 3 353 , 1, 9 5 4 5, 616 4 4, 521
Provisions for pensions 85 458 225 9, 5 17 89 53 0 , 1, 0 4 4 , 7, 4 7 9
Variable compensation earned 13 5 523 31 , 2,026 235 8 75 74 5 , 1, 28 4
Total s 05 , 2,9 t 8 , 1, s 5 8 , 63,726 67 7 , 3, 359 , 7, 2 8 2 , 53,2 83
of which postponed variable compensation 54 15 2 0 24 6 94 350 18 5 88
of which variable compensation paid 81 371 31 , 1, 7 7 9 141 525 56 0 1, ,19 6
Number of persons who received only
fixed compensation
Number of persons who received both fixed
and variable compensation 1 9 4 11 0 1 7 22 88
Total 6 12 20 6, ,1 5 6 6 11 66 94 2
Postponed variable compensation, January y 1 231 763 595 88 176 4 92 523 0
Variable compensation postponed during the year 54 15 2 0 24 6 94 35 0 185 88
Disbursed during the year – –31 – –50 0 – –12 2 – –38 – –22 – –111 0
Adjusted during the year 0 – –10 – –595 53 4 0 – –57 – –1 0
Postponed variable compensation, December ecember 31 255 855 8 56 s 231 763 595 88
Share savings programmes 1 23 1
Recognised expense related to payment in the
form of shares in the Bank of Åland Abp 13 9
Recognised expense for social security fees
related to share-based portion 11
Total recognised expense 15 8
Bank of Åland Plc
Annual and sustainability report
“Risk-takers” in the Bank’s compensation policy documents refers to sta me aff members who are regarded as having a significant impact on the Bank’s risk profile.
During g 202 th 2 the number of risk-takers decreased due to changes in current regulations. The number of risk-takers on December ber 3, 1, 2 23 tot 1 totalled ed 78, while the
corresponding figure on December ber 3, 1, 2 23 wa 1 was s 4. T 4. The Bank has established qualitative and quantitative criteria for the purpose of identifying those employees
who have a significant impact on the Bank’s risk profile.
General
The Bank’s compensation system shall be compatible with the
Group’s corporate strategy, goals and values, as well as being
compatible with and promoting good, ee d, effective risk management.
The compensation system shall be constructed in such a way that it
does not counteract the long-term interests of the Group. An analysis
is carried out to determine how the compensation system ae stem affects the
financial risks that the Bank is subjected to and the management of
these risks. There shall be a suitable balance between fixed and vari-
able compensation. The Group’s total compensation for a single earn-
ing period shall not build up and reward risks that may jeopardise the
long-term interests of the Group.
The Bank has an earnings-based compensation system including
the Managing Director and the rest of the Executive Team. There are
also separate earnings-based compensation systems for employees
in the Group’s business areas. Earnings-based compensation for a
single individual may not exceed an amount equivalent to monthly quivalent to 12 monthly
salaries per financial year.
Board of Directors
The fees of the Board members are established by the General Meet-
ing. During the period from the d from the 2 A 022 Annual General Meeting to the
receive an annual fee as well as a fee for each Board and Commit-
tee meeting attended. The Chairman of the Board receives an annual
each Board meeting they attend. The meeting fee amounts to EUR
ing attended. Each member of a Board committee is paid EUR e is paid EUR 75 0
per committee meeting attended. The chairman of each respective
committee receives a meeting fee of EUR , p e of EUR 1,000 per committee meet-
ing attended. The members of the Bank’s Board of Directors are not
included in share-based compensation systems.
Managing Director
The Managing Director receives a monthly salary of EUR y of EUR 3, 1,00. He 0. He
also receives free automobile benefits and is entitled to the employee
benefits that are generally applicable at the Bank. During . During 202, the 2, the
Managing Director was paid compensation totalling EUR , lling EUR 570,2 27
including fringe benefits and variable compensation. Of the variable
compensation paid in ation paid in 202, EUR , 2, EUR 85,96 wa 8 was paid in cash and EUR
The Managing Director’s minimum retirement age is and his mum retirement age is 65 and his
maximum retirement age is . He will receive a pension in accord ximum retirement age is 70. He will receive a pension in accord-
ance with the Finnish national pension system. He is not entitled to
a supplementary pension in addition to the statutory public pension.
The notice period in case of resignation initiated by the Managing
Director is nine ( tor is nine (9) months. During this notice period, he will receive
a regular monthly salary. According to his employment contract,
the Managing Director is entitled to severance pay totalling nine () 9)
months’ salary in case of dismissal by the Bank. Upon resignation,
the Managing Director is not entitled to any other compensation.
Senior executives
Compensation to other members of the Executive Team is paid as a
fixed individual monthly salary plus generally applicable employment
benefits at the Bank. The other members of the Executive Team are not
covered by any supplementary pension arrangement. Due to a diver-
gent pension system in Sweden, the Bank has obtained defined con-
tribution-based supplementary pension insurance for members of the
Executive Team residing in Sweden, with a retirement age of . ge of 65.
Disclosures concerning earnings-based (variable) compensation
and share-based compensation systems
Earnings-based compensation for risk-takers
is paid in its entirety
when the compensation is set, if the actual compensation sum for a
single individual amounts to a maximum of EUR , ximum of EUR 50,00K 0K. If the com-
pensation exceeds EUR ds EUR 5,, disbursal of at lea 0,000, disbursal of at least st 4 per cent of 0 per cent of
earnings-based compensation shall be postponed by at least three
years (vesting period). If the earnings-based compensation for an
individual amounts to an especially large percentage of total fixed
and earnings-based compensation, the disbursal of at least p t 60 per
cent of the earnings-based compensation is postponed in a simi-
lar way. Since the Bank of Åland Plc is a listed company, at least land Plc is a listed company, at least 5 0
per cent of the earnings-based compensation is paid in the Bank’s
shares. Since Ålandsbanken Fondbolag Ab is a fund management
company, at least p t 50 per cent of variable compensation to risk-takers
must be paid in fund units. The allocated shares/fund units must be
held for at least mont st 12 months (deferral period) before the recipient of
the compensation may have access to them. The disbursement may
be further postponed in light of a comprehensive assessment based
on the Group’s economic cycle, the nature of its business operations
and risks and the job duties and responsibilities of the individual.
The Bank is entitled to abstain from disbursing postponed earning-
based compensation if the Group’s financial position has substantially
deteriorated.
For information about the number of shares connected to the vari-
able compensation programmes, see the section entitled “Facts on
Bank of Åland shares”.
Share savings programme, 2 022−2023
launch a share savings programme for all Group employees. The one-
year savings period began in July egan in July 202, and pe 2, and 69 per cent of the num-
ber of employees in the Group chose to participate. In January and
through a new share issue. The date of issue of the savings shares
mark the beginning of a three-year qualification period. At the end
of this period, matching shares are distributed to those participants
who still have their savings shares in an earmarked custody account.
The programme ends when the last matching shares have been
strengthen employee motivation, participation and long-term an nd long-term affin-
ity with the Group by o y with the Group by offering all employees the opportunity to obtain
shares in the Bank on favourable terms.
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
New and
increased
individual
impairment
losses
Recovered
from earlier
provisions
Utilised for
actual losses Actual losses
Recovery of
actual losses Total
Expected losses from financial assets recognised at amortised
Lending to the public 1, 2, 26 4 –, 7,1 2 1 – –2, 3 4 3 2, ,7 14 – 4 41 , 5, 073
Debt securities 147 – –2 2 6 0 0 0 – –78
Total expected loan losses 12, s 56 –, 7, s t 4 – –2, 1 2 1 5, ,7 14 – 2 41 , 4,90 s
Expected loss from financial assets recognised at fair value via
other comprehensive income
Debt securities 10 8 – –332 – –2 24
Total expected loan losses via other comprehensive income 10 4 – –33 5 8 8 8 – –2 5 2
Expected loan losses via other comprehensive income are recognised in the income statement under “Net income from financial items at fair value”.
Reserve for
individually
assessed
lending to
the public
Provision
for
expected
losses on
sheet
obligations
Reserve for
expected
losses
on debt
securities
recognised
at
amortised
cost Total
Reserve for
individually
assessed
lending to
the public
Provision
for
expected
losses on
sheet
obligations
Reserve for
expected
losses
on debt
securities
recognised
at
amortised
cost Total
Change in impairment loss reserve
Reserve on January ry 1 14, 6 5 4 3 18 11 4 15, 0 8 7 11, 8 8 4 409 193 12, 4 8 6
New and increased individual impairment losses 18, 2 53 3 93 174 18, 8 2 0 1, 2,26 4 263 147 12, 6 74
Net changes due to revisions in estimation
method –, –1, 6 9 8 – –2 5 9 –, –1, 95 6 0 0 0
Recovered from earlier provisions – –1 0, ,112 – –408 – –1 74 – –10, 6 9 4 –, 7,1 2 1 – –35 1 – –2 2 6 –, 7, 6 9 8
Utilised for actual losses – 651 0 0 – 651 –, –2, 3 4 3 0 0 – –2, 3 4 3
Exchange rate dieren fferences and other adjustments – 4 11 – –1 – 4 13 – –30 – –2 – –32
Reserve on December December 31 , 20,036 60 11 2 5 8, ,19 5 6, 4,654 318 11 2 , 15, 8 4 7
Receivables with forbearance measures
Lending to the public
Receivables without past-due amounts and
receivables with past-due amounts st-due amounts <= 6 days 0 days 7 0 07 14, 6 3 5
Defaulted receivables 18 3 7 2 1, 7, 2 1 4
Gross carrying amount 25 38 8 1, 1, 4 2 t
“Receivables with forbearance measures” refers to loan receivables for which the Bank has granted the borrower concessions because of his/her obviously worsened financial
situation, in order to avoid problems with the borrower’s repayment capacity and thereby maximise the repayment of the outstanding receivable. Concessions may include
adjusted loan conditions, such as postponed principal repayments, a reduced interest margin or an extended repayment period, or refinancing, which may mean that a loan
has been fully repaid close to its original due date and in connection with this has been replaced with a new loan. The carrying amount refers to gross exposures and includes
not only restructured loans but also other loans in a customer entity.
Income statement
Taxes related to prior years 7 389
Current taxes 11, 2 0 1 , 7, 0 9 3
Changes in deferred taxes –, –1,8 9 4 , 1, 8 6 7
Total , 9, 314 , 9,3 2 4
Nominal tax rate in Finland, , % . 20.0 . 20.0
Non-taxable income/deductible expenses, /deductible expenses, % . 0.0 – –1. .7
Swedish tax rate, x rate, % . 0.3 . 0.4
Taxes related to prior years, s, % . 0.0 . 0.3
Other, % – 0. .1 . 0.0
Other comprehensive income
Current taxes – –25 7 – –176
Changes in deferred taxes – –2 0 6 9 82
Total – –4 63 806
The tax rate in Sweden was . s 20.6%.
Bank of Åland Plc
Annual and sustainability report
Profit for the period attributable to shareholders 10, ,7 78 1, 9,8 49
Average number of shares before dilution 15, 5 2 6, ,114 1, 5,5, 99,454
Average number of shares after dilution 1 5, 5 3, 7, 4 1 8 1, 5,5, 99,4 54
Earnings per share, EUR , 2, 37 , 2,55
Earnings per share after dilution, EUR , 2, 37 , 2, 55
When calculating earnings per share, the average number of shares is calculated as a weighted average of shares outstanding during the period.
Notes to the consolidated balance sheet
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
G 19. Assets and liabilities by currency 202 1
EUR SEK USD Others Total
Cash and cash equivalents 3 0, 7, 2 9 5 34, 4 43 95 15 0 3, 41, 9 83
Debt securities 675, 27 3 301, ,594 2 3, ,110 99, 9,97 7
Lending to credit institutions 2 7, ,561 , 6,797 3, ,1 8 8 , 5, 035 42, ,581
Lending to the public , 2,85, 4,7 4 4 , 1, 4, 31, 4 8 4 , 16, 7 0 8 , 4, 3 02, 937
Shares and participations , 1,5 16 4, 7, 2 9 1 2 1 4 8, 8 10
Derivative instruments , 19, 7 0 9 , 6, 928 1 26, ,637
Other items not allocated by currency 13 4, 7 9 1 13 4, 7 9 1
Total assets 2, ,02, 0, 89 8 , 1, 4 5 4, 5 1 s 2 1, ,1 8 1 5, ,1 4 s , 5,897, ,71 5
Liabilities to credit institutions and central banks 4, 18,3 59 15, 3 7 3 1 423 4 3 4, ,15 6
Deposits from the public 2, ,761, ,1 70 , 1, 2 92, 9 8 1 , 105,854 , 22,0 63 , 4, 1, 82, 068
Debt securities issued 765, 35 9 27, 275 , 792,634
Derivative instruments 1 8, ,16 7 , 5, 4 46 24 , 23,6 36
Subordinated liabilities 0 , 31, 4 3 4 3, 1, 4 3 4
Other items not allocated by currency, including equity capital , 433,787 , 433,787
Total liabilities and equity capital , 4, 396, ,8 60 , 1, 1 72, 5 8 t , 105,855 22, 5 10 , 5,897, ,71 5
Other assets and liabilities allocated
by currency as well as o-balan ff-balance sheet items – –33, 2, 3 4 0 , 62,851 1, 7, 9 7 6
Net position in currencies (EUR) 123, 6 8 8 99 652 12 4, 4 3 8
The net position in Swedish kronor is mainly the structural position that arises because the consolidated accounts are prepared in euros
and the Swedish branch's accounts are in Swedish kronor.
Bank of Åland Plc
Annual and sustainability report
Nominal
amount
Carrying
amount Loss reserve
Nominal
amount
Carrying
amount Loss reserve
Debt securities eligible for
refinancing with central banks
Government bonds , 444, 1 9 1 , 434,340 48 , 56,389 5 6, 9 18 10
Covered mortgage bonds 1 7, 4,066 17, 1, 76 3 14 , 242,372 24 6, ,6 9 4 16
Debt securities issued by credit institutions 7, 7, 2 3 9 , 75, 3 47 14 9 1, ,12 0 92, ,0 0 4 16
Other debt securities
Holdings at amortised cost
Government bonds 6, 9, 3 10 69, ,785 8 , 85,059 , 85,8 68 40
Covered mortgage bonds 18 0, ,183 1, 79,382 34 14 6, 4 93 1 4 8, 74 4 24
Debt securities issued by credit institutions 5 6, 923 5, 6, 881 15 72, 5 76 72, ,5 4 4 31
Other debt securities
Total debt securities eligible for
refinancing with central banks , 1, 8 8, 1, 911 t 4, 7, 2 t 7 13 1 , 694,0 08 702, ,773 13 7
The entire holding consists of publicly listed debt securities.
Other debt securities
Holdings at accrued cost
Corporate bonds 12, 4 0 5 12, 4 8 0 57 1, 5, 000 15, 0 9 1 19
Total other debt securities 12, 2 8 5 12, 2 4 8 57 6, 5, 000 15, 8 t 6 19
Total debt securities , 1, 8 14, 316 , 999, 977 19 8 , 709, 8 8 4 7 6, 7, 4 s 2 15 s
EUR SEK USD Others Total
Cash and cash equivalents , 579, 971 3 13, 5 18 92 13 8 8, 93,71 9
Debt securities 3, 31, 6 9 0 3 16, 72 0 , 69, 455 0 7 1, 7, 8 6 4
Lending to credit institutions , 25,0 0 6 12, 4 0 7 , 20, 899 6, 0 41 6 4, 353
Lending to the public 2, 8 70, 2 76 1, ,89, 6, 1 99 2, 1, 3 7 1 0 4, 7 8, 7, 8 4 5
Shares and participations , 1, 3 8 0 13, 6 6 5 2 2 15, 0 4 9
Derivative instruments , 11, 3 0 8 , 1, 7 19 0 1 13, 0 2 7
Other items not allocated by currency 14 2, 7 8 2 15, 7, 8 3 1
Total assets , 3,96, 2,4 6 5 , 2,5, 54,22 7 111, 4 16 s, ,1 4 8 , 6, 634, ,639
Liabilities to credit institutions and central banks 336, ,6 5 6 5 3 0, ,12 6 491 2 19 8 6, 7, 4 9 1
Deposits from the public ,, 2,826,61 2 , 1,1 3, 1, 33 8 9, 5, 53 4 16, 6 2 7 4, 0 7 0, ,11 2
Debt securities issued 84, 6, 93 4 3, 49, 6 02 0 0 , 1,1 9 6, 5 3 5
Derivative instruments 4, 3 13 , 2, 5 10 0 0 , 6, 824
Subordinated liabilities , 2,26 6 34, ,07 7 0 0 , 36,343
Other items not allocated by currency, including equity capital 45 7, 333 457, ,333
Total liabilities and equity capital 2, 2 56, ,115 5, 8 2, 7, s 5 5 90, ,026 16, 4 2 s s, ,634, ,639
Other assets and liabilities allocated
by currency as well as o-balan ff-balance sheet items – –3 7, 4,777 – –1, 4,994 11, ,13 9
Net position in currencies (EUR) 131, 7 9 8 79 8 475 13 3, 0 7 0
Bank of Åland Plc
Annual and sustainability report
Repayable
on demand Other
Provision
for
expected
loss Total
Repayable
on demand Other
Provision
for
expected
loss Total
Finnish credit institutions 4, 4 13 0 0 4, 4 13 , 2,5 73 0 0 , 2,573
Foreign banks and credit institutions 3 8, ,17 0 0 0 3 8, ,17 0 , 61, 7 8 0 0 0 , 61, 7 8 0
Total , 42,5 83 3 3 , 42,5 83 0 2, ,353 3 3 64, 353
Gross carrying
amount
Provision for
expected loss
Net carrying
amount
Gross carrying
amount
Provision for
expected loss
Net carrying
amount
Companies , 545, 623 –, –1, 5 0 8 5 4 4, ,115 6 2, 7, 3 5 3 – –2, ,7 2 1 624, 632
Public sector entities , 8,303 – –9 , 8,294 , 8,7 70 – –7 8, ,76 3
Households , 2,0, 05,231 – 6, 593 , 1, 9 9 8, 6 3 8 , 2, 07 3, ,680 –, 7, 2 6 8 2, 0 6 6, 4 12
Household interest organisations 18, ,12 8 – –1 18, ,1 2 6 19, 3 5 1 – –17 , 19, 3 3 5
Outside Finland 1, 74 5, 6 8 8 –, –11,92 4 ,, 1,733,764 , 2,, 073,3 45 – 4, 6 83 , 2, 0 6, 8,70 4
Total , 4, 322, ,9 73 –, 20,0 36 2, ,1 02, ,93 5 ,, 4,802,500 – 7, 4, 654 2 , 5 4, 7, 4 2 1
of which subordinated receivables , 1,7 0 4 262
Stage ge 1 Stage ge 2 Stage ge 3 Total Stage ge 1 Stage ge 2 Stage ge 3 Total
Gross lending to the public 2, 3 2, 7, 1 2 3 , 225, 2 2 2 , 69,781 , 4,, 323, 3 2 2 , 4,603, ,546 13 2, 2 7 2 , 59, 035 ,, 4,802,500
Provisions for expected losses
Balance on January y 1 2, ,11 0 8 42 11, 6 9 3 14, 6 4 5 , 2,508 , 1, 0 47 , 8,3 28 , 11, 8 8 3
Increases due to issuance and acquisitions 6 83 8 4, ,3 75 , 7, 024 4 46 2 79 527
Reduction due to removals from the balance
sheet – –75 4 13 – 4, 433 – 5, ,116 – –531 22 –, –1, 158 –, –1, 6 6 7
Reduction due to impairment losses 0 0 73 73 0 0 17 17
Transfer to Stage ge 1 621 – 6 17 – –4 0 431 – 430 – –1 0
Transfer to Stage ge 2 –, –1, 0 6 7 , 1, 4 35 – –3 6 8 0 – –53 8 90 0 – –3 6 1 0
Transfer to Stage ge 3 – –2 9 – –37 9 409 0 – –15 – –2 3 2 247 0
Net changes due to change in credit risk 494 45 , 7, 0 0 4 , 7, 5 4 4 – –18 9 – –464 , 4,564 3, 9 12
Net changes due to changes in estimation method –, –1, 5 21 – 13 2 – –44 –, –1, 6 9 8 0 0 0 0
Exchange rate dieren fferences and other adjustments – 15 – –31 – –369 – 414 – –1 – –3 – –2 1 – –2 5
Net lending to the public , 4, 026, ,8 2 3 2 24, ,703 , 51, 2 0 1 2,, 303, 3 3 4 2, 0 3, 7, 2 25 7, 39,07 0 2, 7, 1 2 2 2, 5 4, 7, 4 2 1
Dec c 31, , 202 2 Dec c 31, , 202 1
Loan losses IFRS – K S 9 – Key ratios, , %
Total coverage ratio, lending to the public . 0.46 . 0.30
Coverage ratio, Stage , len ge 1, lending to the public . 0.01 . 0.05
Coverage ratio, Stage , len ge 2, lending to the public . 0. 55 . 0.60
Coverage ratio, Stage , le ge 3, lending to the public . 26. 25 1. 9.81
Share of lending to the public in Stage ge 3 . 1.6 1 . 1. 23
Bank of Åland Plc
Annual and sustainability report
Listed , 1,1 6 2 , 1,021
Unlisted 4, 7, 6 4 8 14, 0 2 8
Total shares and participations 2 4, 4 73 15, 3 2 2
The entire holding is classified as financial assets at fair value via other comprehensive income.
Carrying amount on January ry 1 14, 0 3 1 , 7, 2 2 2
Share of profit for the year 544 531
Acquisitions 1 , 5,669
Divestments/Reclassifications –, –8,2 86 – –2
Shareholder contributions 0 7, ,029
Dividends – –73 – –73
Carrying amount on December er 3 6 , 6,7 2 3 14, 0 3 1
The following associated companies and joint ventures were consolidated according to the equity method of accounting on December mber 3, 1, 2 022:
Registered
Mäklarhuset Åland Ab Mariehamn 35
Alandia Holding Ab Mariehamn 28
Helen ÅB Tuulipuistohallinnointiyhtiö Oy Helsinki 40
Leilisuo Oy Simo 50
Riitamaa-Nurmesneva GP Oy Helsinki 50
Uusimo GP Oy Helsinki 50
Combined financial information about these associated companies:
Assets , 42, 373 27, 3,566
Liabilities 1, 7, 8 4 6 22, 1, 0 6 4
Sales , 1, 2 0 6 , 1,3 5 7
Profit for the year , 3, 693 6, ,9 65
Nominal amount/maturity
Under yr er 1 yr – 1– yrs 5 yrs over yr over 5 yrs
Nominal
amount
Positive
market
values
Negative
market
values
Nominal
amount
Positive
market
values
Negative
market
values
Derivatives for trading
Interest-related contracts
Interest rate swaps , 6,06 0 , 6,06 0 294 433 12, 0 6 0 , 1, 6 12 1, ,580
Currency-related contracts
Currency forward contracts , 678, 0 6 0 678, ,0 6 0 , 6,858 , 7, 237 5 4 9, 0 16 , 1, 7 19 2, 5 36
Total , 678,0 0 3 3 , 6,06 3 0 4 2, ,12 3 , 7,1 1 7 , 5,669 1, 61, 3 50 , 1, 331 , 4,09 3
Derivatives for fair value hedges
Interest-related contracts
Interest rate swaps 35 4, ,3 0 0 43 1, ,271 , 45,60 0 8 3, 1,1 7 1 19, 4 8 6 1 7, ,967 824, 421 , 9,69 6 2, ,733
Total 1, 54,300 , 431, 2 71 , 45,60 3 4 1, 1,1 5 7 19, 2 4 0 7, 7, 2 0 5 4 24, 421 , 9,69 0 , 2,733
Derivatives for cash flow hedges
Interest-related contracts
Interest rate and currency swaps , 359,654 , 359,654
Total , 359,6 1 2 3 3 , 359,65 2 3 3 3 3 3
Total derivative instruments ,, 1,392,01 2 2, 31, 2 71 , 51, 0 0 3 , 7, 4 74, 2 2 1 26, ,637 , 23,636 7,, ,385, 497 13, 3 2 5 , 6, 824
of which cleared OTC
of which cleared 13, 3, 954 431, ,271 48, ,630 , 1,1 9 3, 8 5 5
Derivatives are recognised together with their associated accrued interest.
Bank of Åland Plc
Annual and sustainability report
Software
developed
in-house
Other
software
Goodwill
Other
intangible
assets Total
Cost on January y 1 35, 9 16 , 21,61 5 , 2,932 , 7, 4 7 8 67, ,94 0
Cost of intangible assets added 4, ,33 4 18 5 0 0 4, 5 18
Divestments and disposals – –23 0 – –2 5 6 0 0 – –486
Exchange rate ee ffect – 3 15 – –15 0 0 0 – 4 65
Accumulated amortisation and impairment losses on January y 1 – –21, 5 7 1 – –18, 5 3 2 – –3 0 – 4, ,722 – –4, 4, 854
Divestments and disposals 230 256 0 0 486
Amortisation for the year –, –3, 2 0 4 –, –1,101 0 –, –2, 5 35 –, –6,84 0
Exchange rate ee ffect 201 122 0 0 322
Accumulated amortisation and
impairment losses on December er 31 – –2 2, 1 2 2 – –19, 2 1 1 – –1 3 –, 7, 2 1 5 –, –50,887
Residual value on December value on December 31 15, 1 0 3 2, ,13 2 , 2,9 01 221 , 20,6 21
“Other intangible assets” include acquired contracts.
Goodwill in acquired businesses was allocated to the lowest possible
cash-generating unit. The recovery amount for this was established
on the basis of value in use. This means that the present value of the
estimated future cash flows of the assets were calculated using a dis-
count factor.
Impairment testing for cash-generating operations was carried out.
A sensitivity analysis was performed, in which the variables included
in the value in use model were changed and the ee he effect was analysed.
For the projected cash flow, important factors are growth, profit mar-
gin and investments. The discount factor is another important param-
eter for valuation. The profit margin assumed in the model is also at
the level of the final o nal 2022 outcome. A negative per cent change in gative 1 per cent change in
growth, the profitability trend and the discount factor did not result in
any impairment losses.
Software
developed
in-house
Other
software
Goodwill
Other
intangible
assets Total
Cost on January y 1 3 0, ,76 4 , 22,395 , 2,932 , 7, 4 7 8 , 63,569
Cost of intangible assets added 5, 74 0 429 0 0 6, ,16 8
Impairment losses for the year – –23 8 0 0 0 – –23 8
Divestments and disposals – –2 8 2 –, –1, 149 0 0 –, –1, 4 3 1
Exchange rate ee ffect – –68 – 60 0 0 – 12 8
Accumulated amortisation and impairment losses on January y 1 – –1, 8,725 – –18, 5 3 7 – –3 0 –, –1, 8 8 9 – 3 9, ,18 1
Divestments and disposals 282 , 1,14 9 0 0 , 1, 4 3 1
Amortisation for the year –, –3, 0 36 –, –1,1 9 0 0 – –2, 8 33 –, 7, 0 3 2
Impairment losses for the year – –16 3 – –1 0 0 – –16 4
Exchange rate ee ffect 44 48 0 0 92
Accumulated amortisation and
impairment losses on December er 31 –, –21, 1 5 7 – –18, 1 1 2 – –1 3 – 2, ,722 – –4, 4,854
Residual value on December value on December 31 , 14, 1 2 1 , 1, 08 2 , 2,9 01 2, ,757 , 23,0 40
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Payment intermediation receivables , 7, 273 , 2,798
Receivables on mutual fund settlement proceeds 8, 2 13 1 0, 74 8
Accounts receivable , 6, 032 1, 2,0 29
Receivable in conjunction with transfer of assets , 7, 2 7 5 , 4,96 2
Other , 1, 8 6 1 3, 7 74
Total 2, 4, 653 1 2, 1 11
Accrued interest income 15, 4 4 5 12, 7 3 5
Commissions receivable , 6,94 4 , 7, 2 8 6
Other accrued income , 7, 3 0 6 , 7, 6 6 5
Other prepaid expenses , 7, 47 7 , 3,6 0 0
Total 1 1, ,17 2 , 31, 2 4 1
Repayable
on demand Other Total
Repayable
on demand Other Total
Central banks , 400, 000 , 400, 000 6 0 9, 6 74 6 0 9, 6 74
Finnish credit institutions 54 0 54 207 0 207
Foreign credit institutions 3 4, ,1 0 2 3 4, ,1 0 2 6, 6, 078 1 9, 7, 5 3 2 2 5, 7, 6 1 0
Total 1 2, ,7 1 0 , 400, 000 2 1 2, ,7 1 0 0, 3, 285 4 3, 7, 2 3 0 4 0, 7, 2 2 7
Companies , 1,, 143,823 , 1, 2 7, 1, 3 4 3
Public sector entities 92, 9 14 , 73, 032
Households 1, ,8, 05,729 1,, ,365,573
Household interest organisations , 66, 49 9 6 5, 3 13
Outside Finland , 1, 4 7 3, ,1 0 3 1, ,294, ,8 5 1
Total 2, ,18 2, 3 0 4 2, 3 5 3, ,112
Nominal
amount
Carrying
amount
Nominal
amount
Carrying
amount
Certificates of deposit 17, 1, 3 3 4 17 0, 6 0 8
of which at amortised cost 17, 1, 3 3 4 17 0, 6 0 8
Covered bonds 640, ,000 , 622,026 1 1 86 3 2 5 1 1 96 53 5
of which at amortised cost 0 0 , 546,325 , 552,670
of which fair value hedge , 640, 000 , 622,026 , 640, 000 6, 43,8 65
Total 4, 11, 1 1 2 792, ,0 34 , 1,1 4 0, 1 2 1 7, ,7 2 0, 1 1 1
“Fair value hedge” refers to hedge accounting of the interest component in the debt security.
Bank of Åland Plc
Annual and sustainability report
Provisions
for restruc-
turing
reserves
Provision
for o- ff-
balance
sheet
obligations
Other
provisions Total
Provisions
for restruc-
turing
reserves
Provision
for o- ff-
balance
sheet
obligations
Other
provisions Total
Provisions on December ember 3 of th 1 of the previous year 0 3 18 46 363 0 4 09 0 409
Provisions made during the year 13 4 , 1, 8 70 , 2,0 0 4 263 50 313
Amounts utilised 0 – –75 0 – –7 5 0 – –4 – –4
Unutilised amounts recovered – –4 08 – –408 – –351 – –351
Exchange rate changes – –1 – –2 – –3 – –2 0 – –2
Provisions on December er 3 1 3 42 7, ,7 0 1 , 7, 2 3 5 3 1 74 45 363
The provisions for restructuring reserves were related to both Finland and Sweden. These provisions included both sta cos ff costs and other expenses, but primarily consisted of
sta cos aff costs. ”Provision for o-b r off-balance sheet obligations” refers to expected credit losses related to guarantees issued and unutilised credit lines. ”Other provisions” consist of
severance pay.
a decision on the matter, in which it states that the Bank of Åland must pay about EUR . M in VAT. The Ba R 0.5 M in VAT. The Bank of Åland does not agree with the Tax Agency’s assessment and
will appeal the Administrative Court’s negative ruling of December r 202. A p 1. A provision for half the amount was made as a tax expense in the e 202 fi 1 financial accounts.
Nominal
amount
Carrying
amount
Amount in
own funds
Nominal
amount
Carrying
amount
Amount in
own funds
Debenture loan / an 1/20 17 , 2,26 6 , 2, 266 , 2,266
Debenture loan / an 1/20 18 1, 7, 9 8 3 1, 7, 9 7 3 , 31, 9 8 3 19, 5 12 , 19, 4 76 19, 5 12
Green Floating Rate Tier Note ier 2 Note 2 24 1 13, 4 8 7 13, 4 6 1 13, 4 8 7 14, 63 4 14, 6 0 1 14, 6 3 4
Total , 31, 2 53 , 31, 2 1 2 , 31, 2 53 1 0, 411 36, ,343 1 0, 411
Interest rate: Repayment:
Debenture loan / an 1/20 18 -month Stib 3-month Stibor or +. 2.40% May May 1, 5, 2038
Green Floating Rate Tier Note ier 2 Note -month Stibo 3-month Stibor r +. 2. 1 5% December cember 16, , 204 1
The loans may be repurchased in advance, but this is possible only with the permission of the Finnish Financial Supervisory Authority. In case the Bank is dissolved, the loans
are subordinate to the Bank’s other obligations.
Change in hedge reserve
Hedge reserve on January y 1 0
Unrealised changes in value during the year –, –1, 5 61
Hedge reserve on December er 3 6 –, –1, 5 61
Change in fair value reserve
Fair value reserve on January y 1 , 2,99 0 4, ,12 9
Divested or reached maturity during the year – –48 – –33 6
Unrealised change in market value
for remaining and new holdings –, –2, 8 3 5 – –804
Fair value reserve on December er 3 6 107 , 2,9 23
Translation dierence ranslation differences on January y 1 – –141 2, ,13 3
Change in translation diere n differences
attributable to branches – 7, ,668 – –2, 0 9 3
Change in translation diere n differences
due to subsidiaries – –10 14
Change in translation diere n differences attributable to
additional Tier capit ier 1 capital – –2, 2 93 – –2 5 0
Other changes 87 55
Translation dierences on December differences on December 31 – –7 3, 3 2 1 – –14 7
Bank of Åland Plc
Annual and sustainability report
Change in paid-up unrestricted equity capital fund
Paid-up unrestricted equity capital fund
on January y 1 27, ,994 2, 7, 6 1 1
Share-based payment, incentive programme 460 383
Paid-up unrestricted equity fund on December er 3 6 , 28, 455 2, 7, 2 2 2
Retained earnings
Retained earnings on January y 1 17 1, 74 4 1, 58,589
Shareholders’ portion of profit for the
accounting period 36, ,7 78 , 39, 8 49
Dividend paid – 3 1, ,13 0 – 3 1, ,1 8 8
Re-measurement of defined benefit pension plans 5, ,662 , 7, 081
Share savings programmes 13 9
Buy-backs of own shares – 12, 0 7 2
Dividend on additional Tier capit er 1 capital
incl. tax ee x effect – –985 – 671
Other 1 85
Retained earnings on December er 31 , 170, 7 15 75 7, 74 2
Other Tier capit r 1 capital
Other Tier capit r 1 capital on January y 1 2, 9, 424 0
New issue of Tier capit r 1 capital , 29, 424
Other notes
“Operating activities” included interest received of EUR d of EUR 8, 2,5 8 K (, 4 K (66, 1), interest paid of EU 41), interest paid of EUR , R 14,7 7 K ( 7 K (7,) and divid 898) and dividend income received of
Reconciliation of liabilities attributable to funding activities:
Changes not aec ffecting cash flows
Dec c 31, , 202 1
Cash flow
from funding
activities
exchange rate
changes
Accrual of
surplus/deficit
value Other Dec ec 3, 1, 2 24 2
Subordinated debenture loans , 36,343 –, –2,266 – –2, 6 76 32 3, 1, 4 3 4
Lease liabilities 16, ,11 8 –, –3,3 6 3 – –598 5, ,526 1, 7, 6 8 3
Total liabilities attributable to
funding activities 52, 2 62 –, –5,62 2 – 1, 2 74 32 , 5,52 0 2 2, ,11 5
Bank of Åland Plc
Annual and sustainability report
The Bank of Åland has two subsidiaries whose operations are connected in various ways to banking.
The Bank holds a majority of the voting power in all subsidiaries.
Registered oce d office Field of operations Ownership, rship, %
Subsidiaries
Ålandsbanken Fondbolag Ab Finland/Mariehamn Mutual fund management 36 0
Ålandsbanken Fonder Ab Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Fonder II Ab Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Fonder III Ab Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Fonder IV Ab Finland/Mariehamn Mutual fund management 36 0
Ålandsbanken Fonder V Ab Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Fonder VI Ab Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Kiinteistökehitys I GP Oy Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Kiinteistökehitys I Syöttörahasto GP Oy Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Kiinteistökehitys I Syöttörahasto LP Oy Finland/Helsinki Mutual fund management 36 0
Ålandsbanken Havsvind I GP Ab Finland/Helsinki Mutual fund management 36 0
Crosskey Banking Solutions Ab Ltd Finland/Mariehamn IT 36 0
S-Crosskey Ab Finland/Mariehamn IT 60
The Bank of Åland has no holdings of structured entities. Ålandsbanken Fondbolag Ab manages mutual funds and alternate investment funds with
a total value of EUR . billion. R 4.0 billion.
Shares in associated companies and joint ventures
Registered oce d office Field of operations Ownership, rship, %
Mäklarhuset Åland Ab Finland/Mariehamn Estate agents 35
Alandia Holding Ab Finland/Mariehamn Holding company 28
Helen ÅB Tuulipuistohallinnointiyhtiö Oy Finland/Helsinki Financial support operations 40
Leilisuo GP Oy Finland/Simo Wind power 50
Riitamaa-Nurmesneva GP Oy Finland/Helsinki Wind power 50
Uusimo GP Oy Finland/Helsinki Wind power 50
comprehensive income.
Holdings in real estate companies
The Group holds participations in one property for its own use and ten investment properties, of which some are consolidated as follows.
Registered oce d office
Consolidation Ownership, ship, %
Properties for own use
Fastighets Ab Godbycenter Finland/Finström Joint operation 11
Investment properties
Fastighets Ab Nymars Finland/Sottunga Joint operation 30
Fastighets Ab Västernäs City Finland/Mariehamn Joint operation 50
Fastighets Ab Horsklint lint Finland/Kökar Equity method 20
Fastighets Ab Godbycenter, Fastighets Ab Nymars and Fastighets Ab Västernäs City are mutual associations and, in compliance with IFRS , h S 11, have thus been reported as
”joint operations”.
Mutual fund management , 4,, 023, 98 6 ,, 4,298, 456
Discretionary asset management , 2, 48, 8, 957 , 2, 65 4, 831
Advisory asset management 2, 0 36, ,1 8 6 2, 7 2 4, ,115
External mutual funds 11 4, 2 4 8 14 8, 2 5 6
Total 4, ,637, 377 ,, 9,825,659
of which own mutual funds in discretionary
and advisory asset management 79 4, ,8 8 9 8 3 2, 0 19
Bank of Åland Plc
Annual and sustainability report
Collateral pledged for own liabilities
Lending to credit institutions , 22, 863 18, 6 0 4
Government securities and bonds 46, ,9 07 , 262, 1 23
Lending to the public , 1, 2 5 0, 8 3 0 ,, 2,085, 371
Other , 3,68 6 , 3,6 6 4
Total assets pledged for own liabilities 7, ,32, 3,586 ,, 2,369,7 62
Assets pledged in the form of government securities and bonds were mainly provided as collateral to central banks. “Lending to the public” that was provided as collateral
consisted of the registered collateral pool on behalf of holders of covered bonds. “Other assets pledged for own liabilities” refers mainly to endowment insurance.
Other assets pledged
Government securities and bonds , 56, 1 30 5, 1, 0 93
Other 593 , 7, 6 2 1
Total other assets pledged 56, ,723 , 58, 71 2
Assets pledged in the form of government securities and bonds were mainly provided as collateral to central banks and credit institutions for payment systems,
securities trading and clearing.
Assets were not pledged for the liabilities or commitments of others.
Except for loan receivables comprising the collateral pool for covered bonds, where legislation regulates minimum requirements for over-collateralisation, collateral that
exceeds the nominal value of the liability is at the free disposal of the Bank.
Guarantees , 22,89 6 , 43,7 6 7
Unutilised overdraft limits 326, 473 3 11, 8 8 9
Unutilised credit card limits 88, 570 8 8, ,11 6
Unutilised credit facilities 7 0 0, ,12 0 5 5 9, 6 74
Other commitments , 28,0 6 0 , 41, 8 4 6
Total , 1,1 0 0, ,12 3 , 7, 3 2 1, 2 2 1
Provision for expected loss 42 363
Bank of Åland Plc
Annual and sustainability report
Bank of Åland Plc
Annual and sustainability report
Financial lease liabilities will be paid as follows: Minimum rents Interest Present value Minimum rents Interest Present value
Total 19, 0 0 7 , 7, 2 5 2 7, 7, 0 4 1 7, 7, 0 7 0 , 7, 2 2 4 70, ,11 4
Future cash flows
Benefits paid 54 58
Finland, d, % Sweden, n, % Finland, d, % Sweden, n, %
Assumptions
Discount rate . 3.85 . 4.40 . 0.95 . 1. 4 5
Increase in salary expenses . 2.35 . 2.4 0 . 1. 9 0 2. .00
Pension index increase . 2.35 . 2.40 . 1. 9 0 2. .00
Sensitivity of defined benefit obligations to changes in significant assumptions
Change in
assumptions,
Increase in
assumption
Decrease in
assumption
Sensitivity analysis, net present value of pension
Discount rate . 0.5 – –5 19 , 2,39 0
Expected increase in salaries . 0.5 3 43 – –4 06
Expected increase in pensions . 0.5 , 1, 0 4 3 –, –1,1 52
The sensitivity analysis is based on a change in one assumption, while all other assumptions remain constant. In practice this is unlikely to occur, and changes in some of
the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method is used as when
calculating the pension liabilities recognised in the balance sheet. The sensitivity analysis for the defined benefit plan in Sweden has been calculated using a discount rate
and an expected pay increase.
The Bank is exposed to a number of risks because of its defined
benefit plans. The most significant risks are described below.
Pension liabilities are calculated with the help of a discount rate
based on corporate bonds with good credit ratings. If plan assets
generate returns worse than the discount rate, this will cause a
deficit. Plan assets include a sizeable percentage of equities, which
in the long term are expected to provide a higher return than the
discount rate, while providing higher volatility and risk in the short
term. Because of the long-term nature of pension liabilities, the Bank
believes that a continued high percentage of equities is suitable for
managing the plans in an eec lans in an effective way.
In case the yields on corporate bonds fall, this leads to an increase in
pension obligations. Partly o tly offsetting this is the fact that the value of
the bonds that are included in plan assets will increase.
Pension obligations are connected to inflation. Higher inflation will
lead to increased pension obligations. Plan assets are not ae s are not affected by
inflation to any great extent, which means that if inflation increases,
this will lead to an increased deficit in pension plans.
Pension plans generate pensions that extend through the lifetimes of
employees. This means that if life expectancy increases, pension
obligations will increase.
Bank of Åland Plc
Annual and sustainability report
Board and
Executive Team
Related
companies
Associated
companies
Board and
Executive Team
Related
companies
Associated
companies
Assets
Lending to the public 15, 0 4 6 1, 3, 345 0 , 31, 318 1 1, ,558 , 1, 0 73
Other assets 1
Accrued income and prepayments 58 68
Total 15, 3 2 0 13, 2 3 1 3 , 17,174 11, 0 2 5 , 1,0 1 7
Liabilities
Deposits from the public , 6,385 8, 7, 4 0 5 4 12 4, ,1 2 6 , 8,95 8 9, 7, 6 4 5
Total , 6,385 4, 7, 2 3 1 412 2, ,7 2 0 , 8,958 2, 7, 0 2 1
Income and expenses
Interest income 67 42 0 47 23 0 116
Interest expenses – –5 – –33 8 0 – 11
Commission income 6 141 1 6 13 8 1
Other income 9 36
Total 68 232 7 52 367 11 5
The Bank of Åland Group consists of the Parent Company, the Bank of Åland Plc (Ålandsbanken Abp), the subsidiaries that are consolidated in the Group, associated companies,
the Executive Team and other related companies. “Board and Executive Team” includes the Managing Director, individuals on the Board of Directors and other members
of the Executive Team, as well as their close family members. ”Related parties” includes companies or persons with significant influence. ”Related companies” also refers
to companies in which an individual belonging to the Executive Team or a close family member of such an individual has significant influence. ”Related parties” include the
pension fund Ålandsbanken Abp:s Pensionsstiftelse r.s.
Loans to employees are granted on commercial terms. “On commercial terms” means that loans, guarantees, collateral or financing occur on the same terms and according
to the same assessments applied to the Bank of Åland’s customers in general. The employee interest rate is used for loans to employees in Finnish operations. The employee
interest rate is set by the Executive Team and amounted to . d to 0. (. 25 (0. 25) per cent on December er 3, 1, 202 2.
All transactions with related parties have occurred on commercial terms, aside from loans to the Executive Team, which in Finland have been granted at the employee interest rate.
For disclosures on salaries and fees paid to the Board of Directors and the Executive Team, see Note P te P3 4.
For disclosures on Group structure, see Note P e Note P4. 0.
Assets Liabilities Assets Liabilities
Financial assets and liabilities that are subject to
Gross amount , 26,6 01 , 63,9 95 13, 0 2 7 , 53, 85 7
Total , 26,637 , 63,995 13, 3 2 5 , 53, 4 57
Related amounts not os ffset
Financial instruments, netting agreements –, 7, 6 1 0 –, –1, 6 1 0 – 4, 338 – 4, ,33 8
Financial instruments, collateral – –3, 9, 8 31 – –3, 9, 47 8
Cash, collateral –, –3, 000 0 –, 9,752
Total amounts not os ffset –, –7, 0 7 3 – –5 3, ,775 –, 4, 11 4 –, –53,5 0 4
Net amount 7, 2, 027 13, 2 2 3 , 8,689 288
The tables report financial instruments that were o ere offset in the balance sheet in compliance with IAS AS 3 an 2 and those that were covered by legally binding master netting
agreements or similar agreements not qualified for netting. The financial instruments consisted of derivatives, repurchase agreements (repos) and reverse repos, securities
deposits and securities loans. Collateral consisted of financial instruments or cash received or paid for transactions covered by legally binding netting agreements or similar
agreements, which allow netting of obligations to counterparties in case of default. The value of the collateral was limited to the related amount recognised in the balance
sheet, so the excess value of collateral is not included. Amounts not o ot offset in the balance sheet are presented as a reduction in the carrying amount of financial assets or
liabilities in order to recognise the net exposure of the asset and liability.
Bank of Åland Plc
Annual and sustainability report
As part of the share savings programme, the Bank issued ank issued 2, 2,05 new Ser 7 new Series B shares in January y 202. 0.
Bank of Åland Plc
Annual and sustainability report
Parent Company income statement
(EUR K)
Parent Company Jan –Dec , Jan –Dec ,
Note
Interest income , ,
Interest expenses –, –,
Net interest income P , ,
Commission income , ,
Commission expenses –, –,
Net commission income P , ,
Net income from financial items carried at fair value P ,
Income from equity capital investments P , ,
Other income P , ,
Total income , ,
Sta costs P –, –,
Other expenses P –, –,
Statutory fees P –, –,
Depreciation/amortisation and impairment losses
on tangible and intangible assets P, P –, –,
Total expenses –, –,
Profit before loan losses , ,
Expected loan losses from financial assets
recognised at amortised cost P –, –,
Expected loan losses from other financial assets and
impairment losses P
Net operating profit , ,
Appropriations , –,
Income taxes P –, –,
Net profit for the accounting period , ,
Bank of Åland Plc
Annual and sustainability report
Parent Company balance sheet
(EUR K)
Parent Company Dec , Dec ,
Note
Assets
Cash and deposits with central banks , ,
Debt securities eligible for refinancing
with central banks P , ,
Lending to credit institutions P , ,
Lending to the public P ,, ,,
Debt securities P , ,
Shares and participations P , ,
Shares and participations in associated companies P , ,
Shares and participations in Group companies P , ,
Derivative instruments
P , ,
Intangible assets P , ,
Tangible assets P , ,
Other assets P , ,
Accrued income and prepayments
P , ,
Deferred tax assets P , ,
Total assets ,, ,,
Liabilities
Liabilities to credit institutions and central banks P , ,
Deposits from the public P ,, ,,
Debt securities issued P , ,,
Derivative instruments
P , ,
Other liabilities P , ,
Provisions P
Accrued expenses and prepaid income
P , ,
Subordinated liabilities P , ,
Deferred tax liabilities P ,
Total liabilities ,, ,,
Appropriations
General loan loss reserve¹ , ,
Total appropriations , ,
Equity capital
Share capital , ,
Share premium account , ,
Reserve fund , ,
Hedge reserve –,
Fair value reserve ,
Translation reserve –, –
Unrestricted equity capital fund , ,
Retained earnings , ,
Total equity capital , ,
Total liabilities and equity capital ,, ,,
O–balance sheet obligations P
Obligations to a third party on behalf of customers
Guarantees , ,
Irrevocable commitments given on behalf of customers ,, ,
Loan loss provisions in compliance with Finland’s Business Income Tax Act, Section .
Bank of Åland Plc
Annual and sustainability report
Parent Company statement of changes in equity capital
(EUR K)
Parent Company
Share
capital
Share
premium
account
Reserve
fund
Hedge
reserve
Fair value
reserve
Translation
dierence
Own
shares
Unre-
stricted
equity
capital
fund
Retained
earnings
Totalt
Equity capital,
Dec ,
, , , , , , , ,
Profit for the period , ,
Change in fair value –, –,
Translation dierence –, –,
Dividend payments –, –,
Incentive programme
Other – –
Equity capital,
Dec ,
, , , , – , , ,
Profit for the period , ,
Change in fair value –, –, –,
Translation dierence –, –,
Buy-backs of own shares –, –,
Annulment of own shares , –,
Dividends paid –, –,
Incentive programme
Equity capital,
Dec ,
, , , –, –, , , ,
For further data, see Note P and the section entitled “Facts on Bank of Åland shares”.
Bank of Åland Plc
Annual and sustainability report
Parent Company cash flow statement
(EUR K)
Parent Company Jan –Dec , Jan –Dec ,
Cash flow from operating activities
Net operating profit , ,
Adjustment for net operating profit items not aecting cash flow
Depreciation/amortisation and impairment losses
on intangible and tangible assets , ,
Impairment losses on loans and other commitments , ,
Unrealised changes in value –, ,
Accrued surpluses/deficits on debt securities and bonds issued , ,
Income from investing activities – ,
Dividends from associated companies and subsidiaries –, ,
Income taxes paid –, ,
Increase () or decrease () in receivables from operating activities
Debt securities eligible for refinancing with central banks –, ,
Lending to credit institutions , ,
Lending to the public , ,
Other assets –, ,
Increase () or decrease (–) in liabilities from operating activities
Liabilities to credit institutions –, ,
Deposits from the public , ,
Debt securities issued –, ,
Other liabilities –, ,
Total cash flow from operating activities –, ,
Cash flow from investing activities
Investment in shares and participations –, ,
Divestment of shares and participations
Investment in shares of associated companies and subsidiaries ,
Divestment of shares in associated companies and subsidiaries
Dividends received from associated companies and subsidiaries , ,
Investment in tangible assets –,
Divestment of tangible assets
Investment in intangible assets –, ,
Total cash flow from investing activities – ,
Cash flow from financing activities
Share issue
Buy-backs of own shares –,
Increase in subordinated debentures ,
Decrease in subordinated debentures –, ,
Dividend paid –, ,
Total cash flow from financing activities –, ,
Exchange rate dierences in cash and cash equivalents – –
Change in cash and cash equivalents –
Cash and cash equivalents at beginning of year , ,
Cash flow from operating activities –, ,
Cash flow from investing activities – ,
Cash flow from financing activities –, ,
Exchange rate dierences in cash and cash equivalents –, ,
Cash and cash equivalents at end of year , ,
Cash and cash equivalents consisted of the following items:
Cash and deposits with central banks , ,
Lending to credit institutions that is repayable on demand , ,
Total , ,
“Cash and cash equivalents” refers to cash, cheque account with the Bank of Finland, lending to credit institutions that is repayable on demand, other lending to credit
institutions and debt securities with an original remaining maturity of less than three months as well as claims on public sector entities that are not lending. “Investing
activities” refers to payments related to tangible and intangible assets as well as holdings of shares and participations aside from shares intended for trading. “Financing
activities” refers toitems among equity capital and liabilities that fund operating activities. The analysis was prepared according to the indirect method.
“Operating activities” included interest received of EUR , K (,), interest paid of EUR , K (,) and dividend income received of EUR K ().
Bank of Åland Plc
Annual and sustainability report
Table of contents,
notes to the Parent Company financial statements
P. Parent Company accounting principles .................................
P. Net interest income ....................................................................
P. Net commission income ............................................................
P. Net income from financial items carried at fair value ........
P. Income from equity instruments ............................................
P. Other income ...............................................................................
P. Sta costs ......................................................................................
P. Other expenses ...........................................................................
P. Statuatory fees .............................................................................
P. Expected credit (loan) losses ...................................................
P. Income taxes ................................................................................
P. Fair values and carrying amounts of financial assets,
liabilities and fair value levels
...............................................
P. Assets and liabilities by currency .......................................
P. Holdings of debt securities .......................................................
P. Lending to credit institutions ...................................................
P. Lending to the public .................................................................
P. Shares and participations..........................................................
P. Derivative instruments ..............................................................
P. Intangible assets .........................................................................
P. Tangible assets .............................................................................
P. Other assets .................................................................................
P. Accrued income and prepayments .........................................
P. Deferred tax assets and liabilities ...........................................
P. Liabilities to credit institutions .................................................
P. Deposits from the public ...........................................................
P. Debt securities issued ................................................................
P. Other liabilities ............................................................................
P. Provisions ......................................................................................
P. Accrued expenses and prepaid income ................................
P. Subordinated debentures .........................................................
P. Maturity breakdown of assets and liabilities........................
P. Claims on Group companies ...................................................
P. Liabilities to Group companies ................................................
,
E
P. Salaries/fees paid to the Board of Directors and
Executive Team ............................................................................
P. Private shareholdings of the Board of Directors and
the Executive Team in Bank of Åland Plc .............................
P. Financial transactions with related parties ...........................
P. Assets pledged ............................................................................
P. O-balance sheet obligations ..................................................
P. Rental obligations ......................................................................
P. Subsidiaries and associated companies ...............................
P. Distributable profit .....................................................................
Bank of Åland Plc
Annual and sustainability report
Notes to the income statement
Notes to the Parent Company financial statements
(EUR K)
P. Parent Company accounting principles
The financial statements of the Bank of Åland Plc have been drawn
up in accordance with the Finnish Credit Institutions Act, the Ministry
of Finance ordinance on annual accounts and consolidated annual
accounts of financial institutions and securities companies and the
regulations of the Financial Supervisory Authority. The financial
statements of the Bank of Åland Plc have been prepared in
compliance with Finnish accounting standards (FAS). The Parent
Company’s financial statements are presented in thousands of
euros (EUR K), unless otherwise stated.
Goodwill
Goodwill is amortised over years.
Appropriations
Voluntary provisions that the Bank of Åland has made based on
Section of the Finnish Business Income Tax Act are recognised
under “Appropriations”.
Otherwise, please see the consolidated accounting principles.
P. Net interest income
Lending to credit institutions and central banks , ,
Lending to the public , ,
Debt securities ,
Derivative instruments , ,
Other interest income
Total interest income , ,
of which interest according to the eective
interest method , ,
Liabilities to credit institutions and central banks , ,
Deposits from the public , ,
Debt securities ,
Subordinated liabilities , ,
Derivative instruments , ,
Other interest expenses
Total interest expenses , ,
of which interest according to the
eective interest method , ,
Net interest income , ,
Interest income received from Group companies was EUR K ().
Interest expenses paid to Group companies were EUR K ().
Interest from derivative instruments is recognised together with the item that they hedge within the framework of hedge accounting (fair value hedge and cash flow hedge)
and the fair value option.
Bank of Åland Plc
Annual and sustainability report
P. Net commission income
Deposits , ,
Lending , ,
Payment intermediation , ,
Mutual fund commissions
Asset management commissions , ,
Securities brokerage , ,
Legal services
Guarantee commissions
Other commissions , ,
Total commission income , ,
Payment intermediation commission expenses –, –,
Asset management commission expenses –, –,
Securities brokerage commission expenses –, –,
Other commission expenses – –
Total commission expenses –, –,
Net commission income , ,
P. Net income from financial items carried at fair value
Realised Unrealised Total Realised Unrealised Total
Valuation category fair value via
the income statement (“profit and loss”)
Derivative instruments – –
Other financial items – , , –, –,
Valuation category fair value via
the income statement (“profit and loss”) – , , –, –
Valuation category fair value via other
comprehensive income
Realised changes in value , ,
Expected loan losses – –
Total, valuation category fair value via other
comprehensive income , – ,
Hedge accounting
of which hedging instruments –, –, –, –, –,
of which hedged item , , , , ,
Hedge accounting
Valuation category accrued cost
Loans , – , – –
Debt securities
Total, valuation category accrued cost , – , –
Foreign currency revaluation – – – –
Total , , , , –,
P. Income from equity instruments
Holdings recognised at fair value via other
comprehensive income
Associated companies
Group companies, dividend paid , ,
Total , ,
Bank of Åland Plc
Annual and sustainability report
P. Other expenses
IT expenses (excluding market data) , ,
Rents , ,
Other costs of premises and property , ,
Marketing expenses , ,
Market data , ,
Sta-related expenses , ,
Travel expenses
Purchased services , ,
Other expenses , ,
Total , ,
Fees paid to auditors
Auditing fees paid
In compliance with Finnish Auditing Act,
Ch. , Sec. , Par.
Consulting fees paid
Tax matters
Other
Total
These amounts include value-added tax (VAT).
Fees paid to KPMG OY Ab for expenses other than auditing totalled EUR K ().
P. Other income
Rental income on properties
Intra-Group services , ,
Income from acquired contracts ,
Income in conjunction with transfer of assets ,
Miscellaneous income , ,
Total , ,
Net income from investment properties
Rental income
Capital gains
Other income
Other expenses – –
Total
P. Sta costs
Salaries and fees , ,
Compensation in the form of shares
in Bank of Åland Plc
Pension expenses , ,
Other social security expenses , ,
Total , ,
Number of employees
Permanent full-time employees
Permanent part-time employees
Temporary employees
Total
Bank of Åland Plc
Annual and sustainability report
P. Expected credit (loan) losses
New and
increased individual
impairment losses
Recovered
from earlier
provisions
Utilised for
actual losses Actual losses
Recovery of
actual losses Total
Expected losses from financial assets recognised at
amortised cost and from o-balance sheet obligations
Lending to the public , –, – – ,
O-balance sheet obligations – –
Debt securities –
Total expected loan losses , –, – – ,
Expected losses from financial assets recognised at
fair value via other comprehensive income
Debt securities –
Total –
New and
increased individual
impairment losses
Recovered
from earlier
provisions
Utilised for
actual losses Actual losses
Recovery of
actual losses Total
Expected losses from financial assets recognised at
amortised cost and from o-balance sheet obligations
Lending to the public , –, –, , – ,
O-balance sheet obligations – –
Debt securities – –
Total expected loan losses , –, –, , – ,
Expected losses from financial assets recognised at
fair value via other comprehensive income
Debt securities – –
Total – –
Expected loan losses via other comprehensive income are recognised in the income statement under “Net income from financial items at fair value”.
Reserve for
individually
assessed
receivables
from the
public
sector
and public
sector
entities
Provision
for
expected
losses on
o-balance
sheet
obligations
Reserve for
expected
losses
on debt
securities
recognised
at
amortised
cost Total
Reserve for
individually
assessed
receivables
from the
public
sector
and public
sector
entities
Provision
for
expected
losses on
o-balance
sheet
obligations
Reserve for
expected
losses
on debt
securities
recognised
at
amortised
cost Total
Change in impairment loss reserve
Reserve on January
, , , ,
New and increased individual impairment losses
, , , ,
Net changes due to revisions in
estimation method
–, – –,
Recovered from earlier provisions
–, – – –, –, – – –,
Utilised for actual losses
– – –, –,
Exchange rate dierences
– – – – – –
Reserve on December
, , , ,
P. Statutory fees
Guarantee fee
Stability fee , ,
Total , ,
The guarantee fee includes the deposit guarantee fee and the fee for the Investors’ Compensation Fund.
Fees to the Finnish Financial Stability Authority
Deposit guarantee fee , ,
Paid by the old Deposit Guarantee Fund –, –,
Stability fee , ,
Administration fee
Total , ,
Given the fee level, the Bank has prepaid deposit guarantee fees for about five years.
Bank of Åland Plc
Annual and sustainability report
P. Income taxes
Income statement
Taxes related to prior years
Current taxes , ,
Changes in deferred taxes –
Total , ,
Nominal tax rate in Finland, , .
Non-taxable income/deductible expenses, –. –.
Swedish tax rate . .
Taxes related to prior years, . .
Other, . .
Eective tax rate, . .
Deferred tax assets and liabilities were calculated according to a . tax rate, which went into eect on January , .
The tax rate in Sweden was ..
Notes to the balance sheet
P. Fair values and carrying amounts of financial assets, liabilities and fair value levels
Total carrying
amount Fair value
Total carrying
amount Fair value
Cash and accounts with central banks , , , ,
Debt securities eligible for
refinancing with central banks , , , ,
Lending to credit institutions , , , ,
Lending to the public ,, ,, ,, ,,
Debt securities , , , ,
Shares and participations , , , ,
Shares and participations in associated companies , , , ,
Shares in subsidiaries , , , ,
Derivative instruments , , , ,
Total financial assets ,, ,, ,, ,,
Liabilities to credit institutions , , , ,
Deposits from the public ,, ,, ,, ,,
Debt securities issued , , ,, ,,
Derivative instruments , , , ,
Subordinated liabilities , , , ,
Subordinated liabilities ,, ,, ,, ,,
Level Level Level Total
Financial instruments carried at fair value in the balance sheet
Assets
Debt securities eligible for refinancing with central banks , ,
Lending to the public , ,
Shares and participations , , ,
Derivative instruments , ,
Total , , , ,
Liabilities
Debt securities issued , ,
Derivative instruments , ,
Total , ,
Bank of Åland Plc
Annual and sustainability report
Level Level Level Total
Financial instruments carried at fair value in the balance sheet
Assets
Debt securities eligible for refinancing with central banks , ,
Lending to the public , ,
Shares and participations , , ,
Derivative instruments , ,
Total , , , ,
Liabilities
Debt securities issued , ,
Derivative instruments , ,
Total , ,
Level Instruments with quoted market prices
Level Measurement techniques based on observable market data
Level Measurement techniques based on non-observable market data
Shares and
participations
Shares and
participations
Change in Level holdings
Carrying amount on January , ,
New purchases , ,
Divested/reached maturity during the year – –
Unrealised foreign exchange valuation –
Realised change in value , –
Carrying amount on December , ,
No transfer occurred between Level and Level .
P. Assets and liabilities by currency
EUR SEK USD Others Total
Cash and cash equivalents , , ,
Debt securities eligible for
refinancing with central banks , , , ,
Lending to credit institutions , , , , ,
Lending to the public ,, ,, , ,,
Debt securities , ,
Shares and participations , , ,
Derivative instruments , , ,
Other items not allocated by currency , ,
Total assets ,, , , , , ,,
Liabilities to credit institutions and central banks , , ,
Deposits from the public ,, ,, , , ,,
Debt securities issued , , ,
Derivative instruments , , ,
Subordinated liabilities , ,
Other items not allocated by currency, including equity capital , ,
Total liabilities and equity capital ,, ,, , , ,,
Other assets and liabilities allocated by currency
as well as o-balance sheet items –, , ,
Net position in currencies (EUR) , ,
The net position in Swedish kronor is mainly the structural position that arises because the Bank’s financial accounts are prepared in euros
and the Swedish branch’s financial accounts are in Swedish kronor.
Bank of Åland Plc
Annual and sustainability report
P. Holdings of debt securities
Nominal
amount
Carrying
amount Loss reserve
Nominal
amount
Carrying
amount Loss reserve
Debt securities eligible for refinancing
with central banks
Government bonds , , , ,
Covered mortgage bonds , , , ,
Debt securities issued by credit institutions , , , ,
Other debt securities
Holdings at amortised cost
Government bonds , , , ,
Covered mortgage bonds , , , ,
Debt securities issued by credit institutions , , , ,
Other debt securities
Total debt securities eligible for refinancing
with central banks
,, , , ,
The entire holding consists of publicly listed debt securities.
Other debt securities
Holdings at accrued cost
Corporate bonds , , , ,
Total other debt securities , , , ,
Total debt securities
,, , , ,
EUR SEK USD Others Total
Cash and cash equivalents , , ,
Debt securities eligible for
refinancing with central banks , , , ,
Lending to credit institutions , , , , ,
Lending to the public ,, ,, , ,,
Debt securities , ,
Shares and participations , , ,
Derivative instruments , , ,
Other items not allocated by currency , ,
Total assets ,, ,, , , ,,
Liabilities to credit institutions and central banks , , ,
Deposits from the public ,, ,, , , ,,
Debt securities issued , , ,,
Derivative instruments , , ,
Subordinated liabilities , , ,
Other items not allocated by currency, including equity capital , ,
Total liabilities and equity capital ,, ,, , , ,,
Other assets and liabilities allocated by currency
as well as o-balance sheet items –, –, ,
Net position in currencies (EUR) , ,
The net position in Swedish kronor is mainly the structural position that arises because the Bank’s financial accounts are prepared in euros and the Swedish branch’s financial
accounts are in Swedish kronor.
P. Lending to credit institutions
Repayable
on demand Other
Provision
for
expected
loss Total
Repayable
on demand Other
Provision
for
expected
loss Total
Finnish credit institutions , , , ,
Foreign banks and credit institutions , , , ,
Total , , , ,
Bank of Åland Plc
Annual and sustainability report
P. Lending to the public
Gross carrying
amount
Provision for
expected loss
Net carrying
amount
Gross carrying
amount
Provision for
expected loss
Net carrying
amount
Companies , –, , , –, ,
Public sector entities , – , , – ,
Households ,, –, ,, ,, –, ,,
Household interest organisations , – , , – ,
Outside Finland ,, –, ,, ,, –, ,,
Total ,, –, ,, ,, –, ,,
of which subordinated receivables ,
P. Shares and participations
Holdings recognised at fair value via
other comprehensive income
Listed , ,
Unlisted , ,
Total , ,
Shares and participations in associated companies , ,
Shares and participations in Group companies , ,
Total shares and participations , ,
During , the shareholding in Borgo AB was reclassified from an associated company to a holding that is recognised at fair value via other comprehensive income.
P. Derivative instruments
Nominal amount/maturity
Under yr – yrs over yrs
Nominal
amount
Positive
market
values
Negative
market
values
Nominal
amount
Positive
market
values
Negative
market
values
Derivatives for trading
Interest-related contracts
Interest rate swaps , , , , , ,
Currency-related contracts
Currency forward contracts , , , , , , ,
Total ,, , ,, , , , , ,
Derivatives for fair value hedges
Interest-related contracts
Interest rate swaps , , , , , , , , ,
Total , , , , , , , , ,
Derivatives for cash flow hedges
Interest-related contracts
Interest and currency swaps , ,
Total , ,
Total derivative instruments ,, , , ,, , , ,, , ,
of which cleared OTC
of which cleared
, , , ,, , , , , ,
Derivatives are recognised together with their associated accrued interest.
Bank of Åland Plc
Annual and sustainability report
P. Intangible assets
Software
developed
in-house
Other
software Goodwill
Other
intangible
assets Total
Cost on January , , , , ,
Cost of intangible assets added , ,
Divestments and disposals – –
Exchange rate eects – – –, –,
Cost on December , , , , ,
Accumulated amortisation and impairment
losses on January – –, –, –, –,
Divestments and disposals
Amortisation for the year – –, – –, –,
Exchange rate eects , ,
Accumulated amortisation and
impairment losses on December –, –, –, –, –,
Residual value on December
Software
developed
in-house
Other
software Goodwill
Other
intangible
assets Total
Cost on January , , , , ,
Cost of intangible assets added , ,
Impairment losses for the year – –
Divestments and disposals –, –,
Exchange rate eects – – – –
Cost on December , , , , ,
Accumulated amortisation and impairment
losses on January – –, –, –, –,
Divestments and disposals , ,
Amortisation for the year – –, –, –, –,
Impairment losses for the year – – –
Exchange rate eects
Accumulated amortisation and
impairment losses on December – –, –, –, –,
Residual value on December , , ,
“Other intangible assets” include acquired contracts.
Bank of Åland Plc
Annual and sustainability report
P. Tangible assets
Investment properties
Properties for own use , ,
Other tangible assets , ,
Total , ,
Investment
properties
Properties
for own use
Other
tangible
assets
Investment
properties
Properties
for own use
Other
tangible
assets
Cost on January , , , ,
New acquisitions ,
Divestments and disposals –, –, – –
Transfer between items –, , –
Exchange rate eects – – – –
Cost on December , , , ,
Accumulated depreciation on January – –, –, – –, –,
Depreciation for the year – – – –
Impairment losses for the year – – – –
Divestments and disposals , ,
Exchange rate eects
Accumulated depreciation on December – –, –, – –, –,
Revaluations on January , ,
Accumulated revaluations on December , ,
Carrying amount , , , ,
of which buildings , ,
of which land and water
of which shares in property companies
The carrying amount for investment properties is the same as market value.
P. Other assets
Payment intermediation receivables , ,
Receivables on mutual fund settlement proceeds , ,
Accounts receivable , ,
Receivables in conjunction with transfer of assets , ,
Other , ,
Total , ,
P. Accrued income and prepayments
Accrued interest income , ,
Other accrued income , ,
Anticipated dividend , ,
Other prepaid expenses , ,
Total , ,
Bank of Åland Plc
Annual and sustainability report
P. Deferred tax assets and liabilities
Deferred tax assets
Provisions
Unused tax depreciation
Impairment loss, financial liability
Income received in advance
Debt securities measured via other
comprehensive income ,
Cash flow hedge
Other
Total deferred tax assets , ,
Deferred tax liabilities
Financial assets measured via other
comprehensive income
Shares and participations ,
Total deferred tax liabilities ,
Net deferred taxes
Accumulated appropriations included a deferred tax liability of EUR , K (,).
Dec ,
Recognised
in income
statement
Recognised
in other
comprehensive
income Dec ,
Changes in deferred taxes
Provisions –
Unused tax depreciation
Measurement, financial liability –
Income received in advance
Debt securities measured via other comprehensive income , ,
Shares and participations measured via other
comprehensive income – –, –,
Cash flow hedge
Other
Total – ,
Dec ,
Recognised
in income
statement
Recognised
in other
comprehensive
income Dec ,
Changes in deferred taxes
Provisions
Unused tax depreciation
Measurement, financial liability
Income received in advance –
Debt securities measured via other comprehensive income –
Shares and participations measured via other
comprehensive income – –
Other
Total –
P. Liabilities to credit institutions
Repayable
on demand Other Total
Repayable
on demand Other Total
Central banks , , , ,
Finnish credit institutions
Foreign banks and credit institutions , , , , ,
Total , , , , , ,
Bank of Åland Plc
Annual and sustainability report
P. Deposits from the public
Companies ,, ,,
Public sector entities , ,
Households ,, ,,
Household interest organisations , ,
Outside Finland ,, ,,
Total ,, ,,
P. Debt securities issued
Nominal
value
Carrying
amount
Nominal
value
Carrying
amount
Certificates of deposit , ,
of which at amortised cost , ,
Covered bonds , , ,, ,,
of which at amortised cost , ,
of which fair value hedge , , , ,
Total , , ,, ,,
“Fair value hedge” refers to hedge accounting of the interest component in the debt security.
P. Other liabilities
Payment intermediation liabilities , ,
Fund settlement liabilities , ,
Trade payables , ,
Other , ,
Total , ,
P. Provisions
Provisions
for restruc-
turing
reserves
Provision
for o-
balance
sheet
obligations
Other
provisions Total
Provisions
for restruc-
turing
reserves
Provision
for o-
balance
sheet
obligations
Other
provisions Total
Provisions on December of the previous year
Provisions during the year
Amounts utilised – – – –
Unutilised amounts recovered – – – –
Exchange rate changes – – – – –
Provisions on December
The provisions for restructuring reserves were related to both Finland and Sweden. These provisions included both sta costs and other expenses, but primarily consisted
of sta costs. “Provision for o-balance sheet obligations” refers to expected credit losses related to guarantees issued and unutilised credit lines. “Other provisions” consist
of severance pay.
Since the Bank of Åland has had a pending case with the Swedish Tax Agency concerning value-added tax (VAT) for the financial year . The Tax Agency has announced
a decision on the matter, in which it states that the Bank of Åland must pay about EUR . M in VAT. The Bank of Åland does not agree with the Tax Agency’s assessment and will
appeal the Administrative Court’s negative ruling of December . A provision for half the amount was made as a tax expense in the financial accounts.
P. Accrued expenses and prepaid income
Accrued interest expenses , ,
Other accrued expenses , ,
Accrued taxes , ,
Prepaid income ,
Total , ,
Bank of Åland Plc
Annual and sustainability report
P. Subordinated debentures
Nominal
amount
Carrying
amount
Amount in
own funds
Nominal
amount
Carrying
amount
Amount in
own funds
Debenture loan / , , ,
Debenture loan / , , , , , ,
Green Floating Rate Tier Note , , , , , ,
Additional Tier capital
Floating Rate Perpetual AT Note , , , , , ,
Total , , , , , ,
Interest rate: Repayment:
Debenture loan / -month Stibor . May ,
Green Floating Rate Tier Note -month Stibor . December ,
Floating Rate Perpetual AT Note -month Stibor . Perpetual
The loans may be repurchased in advance, but this is possible only with the permission of the Finnish Financial Supervisory Authority. In case the Bank is dissolved,
the loans are subordinate to the Bank’s other obligations.
Debenture loan / was issued with a write-down clause. In the event that the Bank of Åland’s or the Group’s common equity Tier (CET) capital ratio falls below per cent,
the loan principal is written down by per cent.
Bank of Åland Plc
Annual and sustainability report
P. Maturity breakdown of assets and liabilities
Undiscounted contractual cash flows
Repayable
on demand mo – mo – mo – yrs – yrs yrs
Not classified
by maturity Total
Assets
Cash and receivable from central banks , ,
Debt securities eligible for refinancing
with central banks , , , , , ,
Lending to credit institutions , ,
Lending to the public , , , , ,, , ,, ,,
Other debt securities , , ,
Shares and participations , ,
Derivative instruments , , , , ,
Intangible assets , ,
Tangible assets , ,
Other assets , ,
Total , , , , ,, , ,, , ,,
Liabilities
Liabilities to credit institutions and central banks , , , ,
Deposits from the public ,, , , , , ,,
Debt securities issued , , , , ,
Derivative instruments , , , , ,
Other liabilities , ,
Subordinated liabilities , ,
Equity capital and appropriations , ,
Total ,, ,, , , , , , ,,
Bank of Åland Plc
Annual and sustainability report
Undiscounted contractual cash flows
Repayable
on demand mo – mo – mo – yrs – yrs yrs
Not classified
by maturity Total
Assets
Cash and receivable from central banks , ,
Debt securities eligible for refinancing
with central banks , , , , , ,
Lending to credit institutions , ,
Lending to the public , , , , ,, , ,, , ,,
Other debt securities , , ,
Shares and participations , ,
Derivative instruments , , , ,
Intangible assets , ,
Tangible assets , ,
Other assets , ,
Total , , , , ,, , ,, , ,,
Liabilities
Liabilities to credit institutions and central banks , , , , , ,
Deposits from the public ,, , , , , ,,
Debt securities issued ,, ,,
Derivative instruments , , , ,
Other liabilities , ,
Subordinated liabilities , , ,
Equity capital and appropriations , ,
Total ,, , , , ,, , , ,,
Bank of Åland Plc
Annual and sustainability report
P. Claims on Group companies
Lending to the public ,
Other assets ,
Accrued income and prepayments , ,
Total , ,
P. Liabilities to Group companies
Deposits from the public , ,
Other liabilities , ,
Accrued expenses and prepaid income , ,
Total , ,
Notes concerning sta, Board of Directors and Executive Team
P. Salaries/fees paid to the Board of Directors and Executive Team
Lampi, Nils
Taxell, Christoer
Ceder, Åsa
Karlsson, Anders Å
Valassi, Ulrika
Wiklöf, Anders
Leino-Haltia Mirel
Board members
Managing Director
Other members of the Executive Team , ,
New Board member,
The amount includes the value of fringe benefits. There are no pension obligations to the members of the Board of Directors. The pension benefits of the Managing Director
are based on customary terms of employment.
P. Private shareholdings of the Board of Directors and the Executive Team in Bank of Åland Plc
See the Board of Directors and Executive Team sections.
P. Financial transactions with related parties
See Note G in the notes to the consolidated financial statements.
Bank of Åland Plc
Annual and sustainability report
P. O-balance sheet obligations
Guarantees , ,
Unutilised overdraft limits , ,
Unutilised credit card limits , ,
Unutilised credit lines , ,
Other commitments , ,
Total ,, ,,
Provision for expected loss
Guarantees for subsidiaries , ,
Unutilised overdraft limits for subsidiaries , ,
Unutilised credit facilities for subsidiaries
P. Rental obligations
Rental payments due
Under year , ,
More than and less than years , ,
More than years
Total , ,
Rental obligations were equivalent to the rental expenses that would arise upon termination of all rental agreements.
Notes concerning assets pledged and contingent liabilities
P. Assets pledged
Assets pledged for own liabilities
Lending to credit institutions , ,
Government securities and bonds , ,
Lending to the public ,, ,,
Other , ,
Total assets pledged for own liabilities ,, ,,
Assets pledged in the form of government securities and bonds were mainly provided as collateral to central banks. “Lending to the public” that was provided as collateral
consisted of the registered collateral pool on behalf of holders of covered bonds. “Other assets pledged for own liabilities” refers mainly to endowment insurance.
Other assets pledged
Government securities and bonds , ,
Other ,
Total other assets pledged , ,
Assets pledged in the form of government securities and bonds were mainly provided as collateral to central banks and credit institutions for payment systems,
securities trading and clearing.
Assets were not pledged for the liabilities or commitments of others.
Except for loan receivables comprising the collateral pool for covered bonds, where legislation regulates minimum requirements for over-collateralisation,
collateral that exceeds the nominal value of the liability are at the free disposal of the Bank.
Bank of Åland Plc
Annual and sustainability report
Other notes
P. Subsidiaries and associated companies
Registered oce Ownership, Carrying amount
Subsidiaries
Crosskey Banking Solutions Ab Ltd Mariehamn ,
S-Crosskey Ab Mariehamn
Ålandsbanken Fondbolag Ab Mariehamn
Ålandsbanken Fonder Ab Mariehamn
Ålandsbanken Fonder II Ab Mariehamn
Ålandsbanken Fonder III Ab Mariehamn
Ålandsbanken Fonder IV Ab Mariehamn
Ålandsbanken Fonder V Ab Helsinki
Ålandsbanken Fonder VI Ab Helsinki
Ålandsbanken Kiinteistökehitys I GP Oy Helsinki
Ålandsbanken Kiinteistökehitys I Syöttörahasto GP Oy Helsinki
Ålandsbanken Kiinteistökehitys I Syöttörahasto LP Oy Helsinki
Ålandsbanken Havsvind I GP Ab Helsinki
Total ,
Associated companies
Mäklarhuset Åland Ab Mariehamn
Alandia Holding Ab Mariehamn ,
Helen ÅB Tuulipuistohallinnointiyhtiö Oy Helsinki
Leilisuo GP Oy Simo
Riitamaa-Nurmesneve GP Oy Helsinki
Uusimo GP Oy Helsinki
Total ,
Housing and real estate companies
Properties for the Group’s own use
FAB Godby Center Finström
Total
Investment properties
FAB Horsklint Kökar
FAB Nymars Sottunga
FAB Västernäs City Mariehamn
Total
P. Distributable profit
Retained earnings , ,
Unrestricted equity capital fund , ,
Capitalised development expenditures – –
Total , ,
Bank of Åland Plc
Annual and sustainability report
Table of contents, sustainability notes
SUSTAINABILITY NOTES, BANK OF ÅLAND
S. Greenhouse gas emissions, tonnes of CO
e ..........................
S. Taxonomy reporting ....................................................................
S. Responsible investments ...........................................................
S. Responsible lending ....................................................................
S. Employees and human resources ............................................
S. Community involvement ...........................................................
S. Purchases and suppliers ..............................................................
S. The UN global goals and an overview of the Bank of
Åland’s related activities ............................................................
Bank of Åland Plc
Annual and sustainability report
Sustainability notes, Bank of Åland
The Bank of Åland’s emissions in the form of carbon dioxide equiva-
lents (CO
e) are compiled in compliance with the Greenhouse Gas
(GHG) Protocol. According to the GHG Protocol, emissions are
reported in three scopes, where the Bank of Åland’s own business
operations account for Scope , which consists of the Bank’s com-
pany cars and their fuel; Scope , which consists of energy use;
and finally, supplier-related emissions from purchases in Scope
upstream. The Bank of Åland pays climate compensation for the
emissions generated by its own operations.
Emissions from the Bank’s own business operations are supple-
mented with information about the emissions in Scope down-
stream, which is the impact of general operations. For the Bank of
Åland, this refers to investments, such as the impact of the loan
portfolio, treasury operations and financial investments via
the Bank’s fund management subsidiary. New for this year is that
the calculations for these areas have been refined and improved,
which means that a larger proportion of their emissions are visible
in than in previous years. Because of these improved calcula-
tions, there was a clear increase from the previous year. But impact
data for some areas of the loan portfolio (Scope downstream from
the loan portfolio’s perspective) are still lacking. To enable compari-
sons between the different areas, these are shown divided into
their respective Scopes , and , seen from their perspective.
The comparative figures for were restated according to
the new models, to provide a better view of the overall situation.
Own emissions
, greenhouse gases
tonnes of CO
e
Intensity, tonnes
of CO
e/EUR M
Intensity, tonnes
of CO
e/EUR M
Dierence in
intensity,
vs
Scope
Emissions from owned and controlled sources
Total Scope
Scope
Energy-related emissions –
Total Scope –
Scope upstream
Purchased goods and services
Capital goods –
Transport and distribution
Waste generated by own operations
Business travel
Leased assets
Total Scope upstream
Total, own emissions
Climate compensation – –
Scope downstream (see specification on next page)
Loan portfolio , , –
Financial investments ,, ,, –
Treasury , , –
Total Scope downstream ,, ,, –
Total greenhouse gases ,, ,,
–
Emissions are calculated using emission factors and the Åland Index, and are based on expensed activities in the income statement. The exception is purchased electricity, which
in the note is deducted according to a market-based method where environmentally certified electricity is deducted to zero CO
e emissions, as is the share of district heating that
comes from renewable sources. However, for the share of electricity consumption derived from non-renewable sources, actual consumption is the basis for the value figure, mul-
tiplied by an emission factor. To ensure comparable figures between the years, emissions were restated retroactively according to this methodology for calculation of energy
consumption, causing estimated emissions to fall from . tonnes of CO
e to . tonnes of CO
e.
Climate compensation for in Q , based on then-estimated emissions of . tonnes of CO
e. The underlying emission amount was restated to . tonnes of CO
e in
the summer of when the energy coecient was changed.
Total tonnes of CO
e from has been recalculated in to reflect changed calculation methods and make it comparable to the total for . The previously reported
,, K tonnes of CO
e is now expanded to , K tonnes of CO
e.
S. Greenhouse gas emissions, tonnes of CO
e
Bank of Åland Plc
Annual and sustainability report
Loan portfolio
tonnes of CO
e
Intensity, tonnes
of CO
e/EUR M
Intensity, tonnes
of CO
e/EUR M
Dierence in
intensity,
vs
Scope and , , – –
Scope
Total, loan portfolio , , – –
Scope data for the loan portfolio are not available and are thus reported as zero.
Total by industries
Private individuals
Home loans
, , –
Securities and other investments
, , – –
Other purposes , ,
Total, private individuals , , – –
Companies
Other service activities , , –
Construction , ,
Real estate activities , , –
Financial and insurance activities , ,
Electricity, gas, steam and air
conditioning supply , , –
Wholesale and retail trade; repair of
motor vehicles and motorcycles , , –
Hotel and restaurant activities , , –
Information and communication –
Agriculture, forestry and fishing , , , ,
Arts, entertainment and recreation , , –
Business activities, private individuals , , – –
Public administration and defence;
compulsory social security –
Manufacturing , ,
Transportation and storage , , –
Education
Rentals, real estate services, travel
services and other supportive services , ,
Water supply, sewerage, waste
management and remediation activities , ,
Legal, financial, scientific and
technical activities , ,
Human health and social work activities
Total companies
, , – –
–
Total, loan portfolio exposures , , – –
The Bank of Åland’s ambition is to calculate the emissions from its lending operations in compliance with the GHG protocol, which is currently applied to those types of lending
for which data are available, but the Bank still uses estimates for those areas where data are missing. In case of a change in calculation method, CO
e emissions in previous periods
are retroactively recalculated according to the updated method, to the extent that data are available for the previous period. As of December , , reported emissions in
have been restated for home mortgage loans due to a major change in the calculation method. In previous years, emissions were estimated using statistics for average household
emissions. In the calculation was switched to a square metre-based method based on the Partnership for Carbon Accounting Financials (PCAF). This change in method means
that the restated figure includes an increase in emissions for home mortgage loans of . tCO
e (total emissions for mortgage loans published in were , tCO
e).
Emissions from corporate lending and lending for investments have also been restated due to a more exact sectoral classification and changes in the choice of emission factors
that are applied. This change means that the restated figure for corporate lending includes a decrease of . tCO
e (: , tCO
e) and for investment loans an increase
of . tCO
e (: , tCO
e). The change is also aected to some extent by the fact that lending volume for the CO
emission calculations has been corrected and thus
increased by EUR million.
The calculations for home mortgages are based on loans for which a residential property was pledged as collateral. Loans for which no collateral or only other types of collateral
were pledged are excluded from the calculations. Emission calculations are based on the size in square metres and the energy performance of the collateral property, to the extent
data are available. Emissions are then calculated based on estimated energy consumption and emissions per square meter for each energy class and property type, according to
data for each country in PCAF’s emission factor database. For those collateral properties for which data on the actual size of the property and its energy class are missing, size is
estimated by applying averages of known data for each property type from the portfolio. As an estimate of energy consumption, a factor from PCAF’s emissions database is used.
As an attribution factor, the Bank applies the average loan-to-value (LTV) ratio for collateral property from loans included in its covered bond. Figures for have been restated
as of December , using the updated calculation method. The change from the emission figure in the previous period is solely due to this change and to a decrease in the
home mortgage portfolio because of the migration of Swedish mortgage loans to another company. In , the scope of information regarding the energy performance certifi-
cates of collateral properties is expected to increase, further improving the quality of the calculations.
Emissions from loans for investments and other private consumption are calculated using estimates based on loan volume and average emission factors from the Bank of Åland’s
mutual funds and consumption from the Åland Index. No changes have been made in the method used during . The change in the portfolio of loans for investments is driven
by a lower emission factor compared to . The emission factor is selected as an average of emission factors for the Ålandsbanken Fondbolag mutual funds on which sustainabil-
ity reporting is done. The factor for the calculations is as of the fund management company’s reporting on December , .
CO
e emissions for corporate loans are calculated using sector-specific estimates based on loan volume, since actual emissions data on the Bank of Åland’s corporate customers
are usually not available. The estimates are based on sector-specific published average emission factors from the Åland Index and Statistics Sweden and the outstanding loan
volume. Loan volume refers to the amount of loans on the balance sheet as of December . Because overall sector-specific emission factors are applied to all customers and due to
some uncertainty in the information on customers’ sector aliations, the estimated emissions from the company portfolio should be regarded as indicative.
The change from the method used in consists primarily of a more detailed sectoral classification of corporate customers according to Nomenclature of Economic Activities
(NACE) codes, a change in the choice of factors for estimating emissions and correction of the loan volume that forms the basis for the calculation.
Scope , downstream, greenhouse gases
Bank of Åland Plc
Annual and sustainability report
Investments
tonnes of CO
e
Intensity, tonnes
of CO
e/EUR M
Intensity, tonnes
of CO
e/EUR M
Dierence in
intensity,
vs
Scope , , – –
Scope , , – –
Scope ,, ,, – –
Total, investments ,, ,, – –
Total by sectors
National governments, central banks and
investment banks
Corporate exposures
Other service activities , ,
Construction , , – –
Real estate activities , ,
Financial and insurance activities , , – –
Electricity, gas, steam and air
conditioning supply , , – , , –
Wholesale and retail trade; repair of
motor vehicles and motorcycles , , – –
Hotel and restaurant activities , – –
Information and communication , , –
Agriculture, forestry and fishing , , –
Arts, entertainment and recreation – –
Manufacturing ,, ,, –
Transportation and storage , ,
Mineral extraction , , – , , –,
Water supply, sewerage, waste
management and remediation activities – –
Legal, financial, scientific and
technical activities – –
Human health and social work activities – –
Total, investments
,, ,, – –
Emission calculations for investments include equities, bonds and physical real estate. The emissions of investment issuers are weighted according to the ownership stake held
by Bank of Åland funds on December , . The Bank primarily used reported emissions data and secondarily used estimated emission data. This estimated data consisted of
third-party data, except for the housing fund Ålandsbanken Bostadsfond, for which the Bank produced its own estimates. Estimates are made for Scope , and with the aim of
having as high a coverage as possible. Emission figures for were restated in . Emissions totalling ,, K tonnes of CO
e were originally reported, but this has now been
recalculated to , K tonnes of CO
e. The reasons for the increase were that coverage has increased, since the Bank’s estimated share of emissions rose, and that we added
Scope to the calculations for the housing fund.
Scope , downstream, greenhouse gases
Bank of Åland Plc
Annual and sustainability report
Treasury
tonnes of CO
e
Intensity, tonnes
of CO
e/EUR M
Intensity, tonnes
of CO
e/EUR M
Dierence in
intensity,
vs
Scope , , – . . –.
Scope – . . .
Scope , , – . . –.
Total, treasury portfolio , , – ., . –.
Total by industries
Construction – . . .
Real estate activities – . . .
Financial and insurance activities , , – . . –.
Electricity, gas, steam and air conditioning
supply , , – . . –.
Public administration and defence;
compulsory social security . . .
Manufacturing , , – . . .
Transport and storage – . . – .
Rentals, real estate services, travel services
and other supportive services – . . .
Operations at international organisations,
foreign embassies etc. . . .
Total, treasury portfolio
, , – . . –.
Total, greenhouse gases ,, ,, –
Emission calculations for the treasury portfolio include cash positions in central banks and bonds. The emissions of investment issuers were weighted according to the ownership
stake held by the Bank of Åland on December , . Emissions data were obtained from the issuers’ annual and sustainability reports and cover Scope , and Scope . In cases
where data were not available from the issuer, estimates were used.
For estimation purposes, a weighted average was calculated for the holdings in the portfolio belonging to the same sector and deemed relatively similar in terms of their oper-
ations. In cases where there are no similar issuers in the portfolio for estimating emission figures, the Bank used emission figures from other issuers estimated to belong to the
corresponding sector and activities.
For issuers whose emission figures were only available at corporate group level, the group emission figures were adjusted to the issuing entity’s proportion according to the
comparative principle.
The emission figures for the treasury portfolio on December , were recalculated retrospectively to include Scope emissions for all holdings and to employ the same
data source for emission figures used in the year’s emission calculations to ensure comparability between years. The recalculation also included emissions for central bank cash
positions.
In the annual report, the Treasury department reported total emissions of , tonnes of CO
e (Scope and ), using emissions data from an external provider that included
both actual emissions figures reported by the companies but also high estimates for companies whose actual emission data were not provided. The corresponding recalculated
figure for the treasury portfolio’s total emissions in was , K tonnes of CO
e (Scope and ), since emission data were obtained from the issuers' annual and sustainability
reports.
Scope , downstream, greenhouse gases
Loan portfolio, Scope and
Investments, Scope and
Treasury, Scope and
Scope downstream, with
respective Scope och
Loan portfolio, Scope and
Loan portfolio, Scope
Investments, Scope and
Investments, Scope
Treasury, Scope and
Treasury, Scope
Scope downstream, with
respective Scope , and
The pie charts show the Bank of Åland’s downstream Scope emissions
(in tonnes of CO
e), with their respective Scope and and respective ,
and , to illustrate the allocation of emissions, since data for the loan port-
folio’s own Scope are not available and are thus reported as zero.
Bank of Åland Plc
Annual and sustainability report
CO
e impact, operations
Total tonnes of CO
e emissions per full-time
equivalent employee ,. ,. –
Total tonnes of CO
e emissions per million euros
of income ,. ,. –
Tonnes of CO
e emissions from own operations
per FTE employee . .
Tonnes of CO
e emissions from own operations
per million euros of income . .
Follow-up, climate target
tonnes of CO
e
The Bank of Åland shall reduce its CO
e emissions
by by compared to ,,. ,,. –
Consumption
Paper consumption, tonnes . . –
Paper consumption, tonnes/full-time equivalent
employee
. .
Energy consomption, GWh . . –
of which renewable, per cent
of which other, per cent
Energy consumption, GWh/FTE employee . .
Business trips, tonnes of CO
e . .
Business trips, tonnes of CO
e/FTE employee . .
Number of business trips ,
of which aircraft, per cent
of which ship, per cent
of which train, per cent
Number of business trips/FTE employee . .
0
0,5
1,0
1,5
2,0
2,50
203020282026202420222020
Greenhouse gases, target and
outcomes
Million tonnes of CO
e
Grand total, greenhouse gases
target: reduction compared to
Total, own emissions
Loan portfolio
Financial investments
Treasury
tonnes of CO
e
Greenhouse gas emissions
Emissions from owned and
controlled sources
Energy-related emissions
Purchased goods and services
Capital goods
Transport and distribution
Waste generated by own operations
Business travel
Leased assets
tonnes of CO
e
Emissions from the Bank´s
own operations
The pie chart shows the Bank's
upstream Scope , and emissions
and downstream Scope emissions.
Data for the loan portfolio's own Scope
emissions are not available, however.
Bank of Åland Plc
Annual and sustainability report
Taxonomy reporting,
procent Covered assets, of total
Covered assets, of total
Assets included in reporting
Exposures to economic activities subject to the taxonomy
. .
Exposures to economic activities not subject to the taxonomy
. .
Exposures exempted from reporting
Derivatives . .
Exposures to companies not subject to NFRD
. .
On-demand interbank loans
Exposures not included in covered assets
Exposures to central governments, central banks and supranational issuers .
Trading portfolio
(EU) / and (EU) / Article .
Home mortgages and housing-related loans to private individuals secured by underlying property as collateral, which are covered by technical screening criteria .–. in
the European Commission’s Delegated Regulation (EU) /.
For exposures not subject to the taxonomy, the Bank of Åland has chosen not to report anything since first-hand data were not available and an assessment of whether the
exposure is subject to the taxonomy was not possible.
Exposures excluded from the numerator in the Green Asset Ratio (GAR) and that are thus not assessed in the taxonomy.
In the case of the Bank of Åland, exposures not subject to the Non-Financial Reporting Directive (NFRD, //EU) include companies with fewer than employees,
which mainly include Åland companies and entrepreneur-run companies on the Finnish mainland and in Sweden, as well as housing companies, tenant-owner associations and
municipalities.
Exposures that are excluded from both the numerator and the denominator of the Green Asset Ratio.
Total assets minus assets to be excluded from both the numerator and the denominator of the GAR.
Starting in , the Bank of Åland has been reporting exposures in
the balance sheet that are covered by the EU’s Taxonomy for sus-
tainable investments. If an exposure is regarded as covered by the
Taxonomy, this means there are criteria for assessing whether it is
environmentally sustainable. Reporting is limited to first-hand data
and thus does not include estimates or derivations, for example
from the EU’s so-called NACE codes. This limitation means that only
part of the Bank of Åland’s exposures could be reported, since the
lack of first-hand data meant that the extent of exposure to the
Taxonomy could be neither defined nor quantified.
S. Taxonomy reporting
Bank of Åland Plc
Annual and sustainability report
Classification and evaluation
EUR of total
Sustainable investments, Article
,
,, .
Investments, Article
,
,,, .
Investments, Article
,
,, .
Product range
Percentage of funds evaluated according to PRI
(Principles for Responsible Investment)
Percentage of fund holdings that have joined SBTi
Percentage of fund holdings that have begun the
process of joining SBTi
Percentage of fund holdings that have not yet
begun the process of joining SBTi
The figures include Ålandsbanken Fondbolag’s managed fund assets, allocated by SFDR classifications.
Comparable data are not available for previous years.
Sustainable investments, Article
Investments, Article
Investments, Article
Fund assets, allocated by SFDR
classifications, Articles , and .
The Bank of Åland has a wide range of products and services where
the environmental, social and corporate governance (ESG) aspects
are integrated into the investment processes. Below are Ålands-
banken Fondbolag's assets under management, allocated by their
classification in SFDR, the EU's regulation for sustainability-related
disclosures. SFDR classifies funds into three main categories,
Articles , and . Article consists of so-called dark green funds
(which put their money into sustainable investments), Article
consists of light green funds (which promote environmental and
social aspects), and Article consists of other funds.
The funds are also evaluated in accordance with the Principles
for Responsible Investment (PRI), so that measures can be taken
when irregularities are noticed. There is also a dialogue with the
companies involved about sustainability goals (SBTi).
S. Responsible investments
Review of investments
of total
Percentage of fund assets that have been ESG
screened
Percentage of companies that violate international
agreements (breach of standards)
Bank of Åland Plc
Annual and sustainability report
Lending to the public
per cent
Percentage of lending to the public by region
Finland
Sweden
Lending to companies
EUR M
Lending to companies, by sector
Agriculture, forestry and fishing
Real estate activities
Transportation and storage
Hotel and restaurant activities
Financial and insurance activities
Electricity, gas, steam and air conditioning supply
Manufacturing
Rentals, real estate services, travel services and
other supportive services
Legal, financial, scientific and technical activities
Construction
Water supply, sewerage, waste management and
remediation activity
Arts, entertainment and recreation
Wholesale and retail trade, repair of motor
vehicles and motorcycles
Other service activities
Human health and social work activities
Information and communication
Education
Public administration and defence, compulsory
social security
Business activities, private individuals
Total lending to companies
, ,
Mortgage loans
kg CO
e/m
CO
e emissions from our mortgage loans
per square metre
. .
of which Finland . .
of which Sweden . .
Green Bonds
per cent
Green Bonds total . .
Renewable energy,
Green properties,
Emissions avoided (due to green bonds instead of
others), tonnes of CO
e
,.
The total includes loan amounts in the balance sheet (not counting overdrafts and credit cards). Business activities, private individuals is included in corporate lending here.
Should only be regarded as a basis for sustainability reporting and diers from other sectoral classification.
Includes only emissions from residential properties with information on actual size in square metres. Sweden only includes flats, since square metre information on other proper-
ties was not available. The Finland figure includes flats and other properties.
Since this capital instrument was not issued until December , there is no estimate of emissions avoided in .
S. Responsible lending
Bank of Åland Plc
Annual and sustainability report
Employee mobility
Expansion, regular positions . . .
Employee turnover . . .
By gender
Women
Men
By region
Åland
Finnish mainland
Sweden
By age category
–
Expansion
Women
Men
Employee turnover:
By gender By age category
–
The Group hired new regular employees during . Expansion was
. per cent compared to total full-time equivalent (FTE) employees,
which was a decrease from . per cent in .
During , people ended their regular employment in the Bank of
Åland Group. This included retirements. As a percentage of average
full-time equivalent employees, this was an emplyee turnover of . per
cent, up from . per cent in .
By region
Åland
Finnish mainland
Sweden
0
200
400
600
800
1,000
202220212020
0
10
20
30
40
50
202220212020
0
20
40
60
80
202220212020
0
200
400
600
800
1,000
202220212020
0
10
20
30
40
50
202220212020
0
15
30
45
60
75
90
202220212020
Åland Finnish mainland Sweden
Regular
Employee contract type by region
Åland Finnish mainland Sweden
Temporary, monthly
Åland Finnish mainland Sweden
Temporary, hourly
Women Men
Regular
Employee contract type by gender
Women Men
Temporary, monthly
Women Men
Temporary, hourly
S. Employees and human resources
Bank of Åland Plc
Annual and sustainability report
Part-time/full-time by gender and region
Part-time Full-time Total
Åland
Women
Men
Total
Finnish mainland
Women
Men
Total
Sweden
Women
Men
Total
Comparable data are not available for previous years.
The number of jobs in the Group totalled at the end of (:
). Among these people, ( per cent) had regular employ-
ment contracts and ( per cent) had temporary contracts. Total gender
representation in the Group was per cent women and per cent
men, divided between full-time and part-time positions. About half
the workforce is stationed in Åland, while the rest are stationed on
the Finnish mainland and in Sweden.
Absences due to illness, accidents
Hours
Absences due to illness, short-term ,
Absences due to illness, long-term ,
Absences due to illness, total ,
Absences due to illness, accidents
Comparable data are not available for previous years.
Short-term absence due to illness refers to all such absences of less than
days during the report period. Long-term absence due to illness refers to all
such absences of days or more during the period. Short-term absences
due to illness account for per cent of the total, and long-term absences
account for per cent.
Bank of Åland Plc
Annual and sustainability report
Gender equality
Gender breakdown
Number
Managers and supervisors (excluding
senior executives)
Women
Men
Total
Senior executives
Women
Men
Total
Employees excluding managers,
supervisors and senior executives
Women
Men
Total
Total workforce excluding the Board
of Directors
Women
Men
Total
Board of Directors
Women
Men
Total
Comparable data are not available for previous years.
Age breakdown
Number
Managers/supervisors (excluding
senior executives)
–
>
Total
Senior executives
–
>
Total
Employees excluding managers/
supervisors and senior executives
,
– ,
> ,
Total
Total workforce excluding the Board
of Directors
,
– ,
> ,
Total
Board of Directors
–
>
Total
Comparable data are not available for previous years.
The Group's goal is a balanced gender breakdown (at least /).
Among managers and supervisors, the breakdown was /. For the
Group, the breakdown was / at year-end . At the Board level,
the breakdown was per cent women and per cent men.
"Senior executives" refers to the Group's Executive Team plus
the managing director and deputy managing director of subsidiaries.
"Board of Directors" refers to all board members in each Group company.
These figures were compiled on the last day of each respective year.
Bank of Åland Plc
Annual and sustainability report
Skills development
Training completed, employees and managers
Total training hours
Number of employees Average per person
Managers
of which women
of which men ,
Total ,
Employees excluding managers/supervisors and
senior executives
of which women ,
of which men ,
Total ,
Including introductory training for new employees.
Training completed, by category
Hours
Introductory training ,
Markets, trends and global events
Changes in technology
Regulatory requirements and security ,
Product development
Enhancing professional skills ,
Changes in working methods ,
Other training
Total ,
Average hours per employee.
Commitment and leadership indices
Commitment Index (–) .
eNPS (– – )
Leadership Index (–) .
Bank of Åland Plc
Annual and sustainability report
Economic value-added
EUR M
Total income minus impairment losses . .
Value-added generated by serving the Bank's
customers . .
Employees
Salaries . .
Social security and other sta costs . .
Total value to employees . .
To central government
Income taxes . .
Non-deductible valure-added taxes . .
Deposit guarantee fees . .
Fees to government stability fund . .
Total value to central government . .
Other value to society
Suppliers
. .
Sponsorships . .
Total other value to society . .
Transactions with shareholders
Dividend paid . .
CET capital instrument, dividend . .
New share issue –. –.
Total transactions with shareholders . .
Remaining in the Bank
Reinvested economic value . .
Refers to miscellaneous administrative expenses and depreciation/amortisation
Tax payments
EUR M Finland Sweden Total Finland Sweden Total
Taxes and similar fees
Income tax . . . . . .
Social security fees . . . . . .
Nondeductible value-added taxes . . . . . .
Deposit guarantee and government stability fund . . . .
Total . . . . . .
0
30
60
90
120
150
180
20222021
Economic value-added
Employees
Central government
Other value to society
Shareholders
Reinvested economic value
Aside from paying income and value added taxes to the Finnish gov-
ernment, the Bank of Åland is a sizeable employer, especially in its
Åland home market.
The Bank contributes to employment by providing about
jobs in Åland, which makes us the second largest private employer
in Åland. By paying social security fees, the Bank of Åland helps
strengthen social protection. In addition, the Bank pays fees to the
government’s stability fund, which helps maintain financial stability
in Finland. The Bank is deeply involved in the Åland community and
contributes to it mainly by supporting culture, sports and studies.
By doing so, we are helping to create meaningful leisure activities
and a future for children and young people. We also regularly
organise information activities that are open to the public.
We broadened our community involvement during by
proactively exploring the potential for new energy solutions, both
offshore and onshore in Åland.
The Bank considers it important to ensure that Åland is a vibrant
community that people want to remain in, move to and return to.
Through the Bank’s employees, we participate actively in numerous
community functions that are important to our home province.
The Bank of Åland’s attitude towards paying taxes
A fundamental part of the Bank of Åland’s sustainability work is
to pay taxes and contribute to the communities where the Bank
operates. The Bank makes a great effort to ensure compliance with
applicable tax laws and regulations and endeavours to act transpar-
ently and in compliance with the purpose of this legislation. When
necessary, the Bank engages in dialogue with the tax authorities.
S. Community involvement
Bank of Åland Plc
Annual and sustainability report
Purchases and suppliers
EUR
Suppliers
Number of active suppliers
Number of supplier dialogues
Purchases, value by category:
Information and communication ,, ,,
Financial and insurance activities ,, ,,
Legal, financial, scientific and technical activities ,, ,,
Real estate activities ,, ,,
Rentals, real estate services, travel services and other
supportive services ,, ,,
Transportation and storage ,, ,,
Wholesale and retail trade , ,
Other service activities , ,
Hotel and restaurant activities , ,
Electricity, gas, steam and air conditioning supply , ,
Human health and social work activities , ,
Public administration and defence; compulsory social
security , ,
Education , ,
Manufacturing , ,
Arts, entertainment and recreation , ,
Construction , ,
Water supply, sewerage, waste management and
remediation activities , ,
Purchases, value, EUR
,, ,,
Active supplier: A supplier that invoiced more than EUR , during the year.
Dialogues: The number of dialogues conducted with suppliers to evaluate their deliveries and collaboration.
Purchases: Total purchases from active suppliers, which invoiced more than EUR ,.
The aim of Bank of Åland’s purchasing management is to ensure
that we buy the right things at the right price, and that suppliers
meet the Bank’s requirements. Procurements must support the
Bank's strategy and comply with the applicable regulations.
S. Purchases and suppliers
Bank of Åland Plc
Annual and sustainability report
. Clean water and sanitation
Targets: .,.,.,.,.B
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s climate targets; see above. One goal is to help reduce pollution in the Baltic Sea. We contribute to this
work through the Baltic Sea Project, which supports companies and organ-
isations that work actively to reduce pollution of waterways.
The Bank of Åland was one of the founders of the Stockholm Water Prize,
which is awarded by the Stockholm International Water Institute (SIWI).
We are still contributing to the annual awarding of the prize.
We have informally eco-labelled the water taps in our oces, which means
that we only serve unbottled water.
. Aordable and clean energy
Targets: ., .
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s climate targets; see above.
Carbon dioxide emissions from electricity consump-
tion shall be maintained at the same level as in
. Our goal is per cent energy from renewa-
ble sources, which we achieved in late .
We give preference to green investment products and oer our customers
investment products that benefit environment characteristics.
Since our Vindkraftsfond (Wind Power Fund) invests in wind farm projects,
we are helping to increase the proportion of renewable energy in the Nordic
countries.
In November the Bank of Åland’s mutual fund company and its Swedish
wind power partner OX signed a memorandum of understanding to
develop the Noatun oshore wind power project Noatun in the Baltic Sea
south of Åland. OX will act as the project developer until the wind farm is
completed, and Ålandsbankens Fondbolag will be the long-term owner of
the project via its mutual funds. The Noatun project is still in an early phase
and, when completed, will consist of about wind turbines that together
will produce about TWh per year, equivalent to the annual electricity
consumption of some four million households.
Below we provide an overview of how our operations affects those
United Nations global goals for sustainable development that are
regarded as priorities for the Bank of Åland.
The Bank’s climate targets
• The Bank of Åland shall reduce its CO
emissions by per cent
no later than compared to . Follow-up: per cent
reduction from to
• The Bank of Åland shall be a climate-neutral organisation no later
than .
• The Bank of Åland shall achieve net-zero emissions by .
S. The UN global goals and an overview of the Bank of Åland’s related activities
Bank of Åland Plc
Annual and sustainability report
. Decent work and economic growth
Targets: .,.,.,.,.,.,.
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s long-term financial targets:
Return on equity after taxes (ROE) shall exceed
over time. Outcome: ..
The common equity Tier capital ratio shall exceed
the FIN-FSA’s minimum requirement by .–.
percentage points. Outcome: . percentage
points above.
The payout ratio shall be or higher, provided
that capital adequacy does not fall below target.
Outcome: The Board’s proposal is .
The Bank of Åland’s climate targets; see above.
Balanced gender distribution between women
and men: At least /. Outcome at Group
level in : /.
Responsible lending: We want to ensure the customer’s repayment capacity
and ensure that the loan meets the customer's needs. We work to integrate
sustainability risk into our risk assessment when new loans are granted.
We oer banking services and lending to individuals and to companies of
varying sizes.
Responsible investments: Our investments exclude companies that violate
the Global Compact, which helps to ensure decent working conditions.
Social responsibility: We work proactively to promote integration into soci-
ety and diversity. For example, by welcoming work and language
trainees we can contribute to employment, integration and diversity.
Social responsibility: We work deliberately to ensure that all employees
shall have equal rights and opportunities in terms of work and professional
development. Our salary model, which is based on work evaluation, and our
annual salary analysis shall ensure equal pay for equivalent work.
Social responsibility: The Bank of Åland’s Code of Conduct helps us and our
suppliers to act responsibly and ethically and requires companies to protect
employee rights and promote a safe and secure working environment for
all. It also requires decent working conditions with equal pay for equivalent
work and requires that employers endeavour to ensure that both women's
and men's experience and knowledge are utilised and represented in all
areas, roles and positions throughout the organisation, creating a corporate
culture where dierences are regarded as an asset.
Social responsibility: We are pursuing gradual work environment improve-
ments and we comply with applicable legal requirements. We attach great
importance to continuously improving cooperation between us as employ-
ers and our sta and union representatives.
. Responsible consumption and production
Targets: .,.,.,.,.,.,.
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s climate targets; see above. The Bank of Åland’s Code of Conduct helps us and our suppliers to act
responsibly and ethically. We follow regulations as well as policies on ethical
conduct and the identification and management of conflicts of interest.
Through training programmes and technical development, we help combat
corruption, money laundering and other criminal activities.
During , we initiated a campaign about sustainable commuting,
coordinated by the Åland sustainability agenda Bärkraft. The purpose of
the campaign is to highlight the advantages and possibilities of sustainable
commuting to and from the workplace.
Through the Baltic Sea Account and the Baltic Sea Card with the Åland Index,
our customers have the opportunity to make their own environmentally
friendly choices.
Together with the charity Emmaus Åland, we have made it easy for our
employees to recycle clothes and shoes by using collection bins at our head
oce.
In purchasing, when the nature of the product allows it, we always study
the possibility of buying used alternatives.
Bank of Åland Plc
Annual and sustainability report
. Climate action
Targets: .,.,.
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s climate targets; see above
Reduce carbon dioxide emissions from travel by
per cent no later than , compared with the
base year . Outcome: A per cent increase.
We calculate CO
e emissions from our core business and our own operations
in accordance with the GHG protocol.
During , we established our climate strategy, which describe how we
will use clear targets on a yearly and long-term basis to reduce CO
e emis-
sions directly or indirectly caused by our operations and thereby achieve our
climate targets.
We will compensate for CO
e emissions in from our own operations
through a compensation portfolio.
How we travel is very important to our climate impact. Our travel policy is
thus part of our strategy to achieve the Bank of Åland’s climate targets.
During , we decided to develop scientifically based emission targets
according to the Science Based Target initiative (SBTi).
The Bank of Åland’s Treasury department is contributing further to promot-
ing long-term sustainable development by issuing green bonds in keeping
with the Bank’s green framework.
In our work to combat climate change, we pursue close collaboration and
a dialogue with UNEP FI and NZBA in our development eorts and work
according to the principles we adopted as members in these international
initiatives.
. Life below water
Targets: .,.,.,.,.A
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s climate targets; see above. Through the Baltic Sea Account and the Baltic Sea Project, we and our
customers help reduce pollution in the Baltic Sea. Various companies and
organisations are given the opportunity to receive funds to turn their ideas
for a healthier sea into reality. Our environmental work started as early as
and has its origins in our location in a mid-Baltic Sea archipelago.
One goal is to help reduce pollution in the Baltic Sea. We contribute to this
work through the Baltic Sea Project, which supports companies and organi-
sations that work actively to reduce pollution of waterways.
. Life on land
Targets: .,.,.A
Goal The Bank of Åland’s activities that contribute to the goal
The Bank of Åland’s climate targets; see above. Through the Åland Index, we are increasing our employees’ and customers’
awareness of their own carbon footprint. At the same time, we are working
to reduce our carbon dioxide emissions.
Our employees are trained and committed to sustainability and environmen-
tal work, for example through local “keep nature clean” projects.
Bank of Åland Plc
Annual and sustainability report
According to the financial statements, distributable profit after subtracting capitalised development
expenses including the unrestricted equity capital fund is EUR ,,., of which the profit for
the financial year is EUR ,,.. No significant changes in the financial position of the Company
have occurred since the end of the financial year.
The Board of Directors proposes to the Annual General Meeting that the distributable profit of the
Bank of Åland Plc, EUR ,,. be allocated as follows:
For Series A and Series B shares outstanding, a dividend of EUR . per share plus an extra dividend of
EUR . per share from retained earnings,
totalling ,,.
To be carried forward as retained earnings ,,.
Mariehamn, February ,
Nils Lampi, Christoer Taxell, Åsa Ceder
Chairman Deputy Chairman
Anders Å Karlsson Mirel Heino-Haltia Ulrika Valassi
Anders Wiklöf Peter Wiklöf,
Managing Director
Auditors’ note
A report on the audit performed has been issued today.
Helsinki, February ,
Henry Maarala Jessica Björkgren Sandra Eriksson
KHT KHT KHT
Proposed allocation of profit
Bank of Åland Plc
Annual and sustainability report
Auditors’ Report
To the Annual General Meeting of Ålandsbanken Abp
This document is an English translation of the auditors’ report in
the Swedish language. Only the auditors’ report in the Swedish
language is legally binding.
Opinion
We have audited the financial statements of Bank of Åland Plc
(business identity code -) for the accounting period January
– December , . The financial statements comprise the consoli-
dated balance sheet, income statement, statement of comprehensive
income, statement of changes in equity capital, cash flow statement
and notes, including a summary of significant accounting policies, as
well as the parent company’s balance sheet, income statement, state-
ment of changes in equity capital, cash flow statement and notes.
In our opinion
• the consolidated financial statements give a true and fair view
of the Group’s financial position, financial performance and cash
flows in accordance with International Financial Reporting Stand-
ards (IFRS) as adopted by the EU.
• the financial statements give a true and fair view of the parent
company’s financial performance and financial position in accord-
ance with the laws and regulations governing the preparation
of financial statements in Finland and comply with statutory
requirements.
Our opinion is consistent with the additional report submitted to
the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice, are further
described in the Auditors’ Responsibilities for the Audit of the Finan-
cial Statements section of our report.
We are independent of the parent company and of the Group com-
panies in accordance with the ethical requirements that are applicable
in Finland and are relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and understanding, the non-audit
services that we have provided to the parent company and Group
companies are in compliance with laws and regulations applicable in
Finland regarding these services, and we have not provided any pro-
hibited non-audit services referred to in Article () of regulation (EU)
/. The non-audit services that we have provided have been
disclosed in note G to the consolidated financial statements.
We believe that the audit evidence we have obtained is sucient
and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application of mate-
riality. The materiality is determined based on our professional
judgement and is used to determine the nature, timing and extent
of our audit procedures and to evaluate the eect of identified
misstatements on the financial statements as a whole. The level of
materiality we set is based on our assessment of the magnitude of
misstatements that, individually or in aggregate, could reasonably
be expected to have influence on the economic decisions of the users
of the financial statements. We have also taken into account misstate-
ments and/or possible misstatements that in our opinion are material
for qualitative reasons for the users of the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judg-
ment, were of most significance in our audit of the financial state-
ments of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opin-
ion on these matters. The significant risks of material misstatement
referred to in the EU Regulation No / point (c) of Article ()
are included in the description of key audit matters below.
We have also addressed the risk of management override of
internal controls. This includes consideration of whether there was
any evidence of management bias that represented a risk of material
misstatement due to fraud.
Key audit matters
Key audit matters
How these matters were
addressed in the audit
Valuation of lending to the public and public sector entities
(Accounting Principles and Notes G, G, G, P, P)
• Lending to the public amounted to EUR . billion. This comprises
approximately per cent of the Group’s total assets.
• IFRS Financial Instruments standard is applied in the calculation
of expected credit losses. Calculation of expected credit losses
involves assumptions, estimates and management judgment.
For example, in respect of the probability and amount of the
expected credit losses as well as determining the significant
increases in credit risk.
• Due to the material carrying amount, the complexity of the calcula-
tion models and the estimates by management concerning impair-
ment losses that were included, valuation of lending to the public is
addressed as a key audit matter.
• We have reviewed the principles and controls attributable to
approval, recognition and monitoring of loans and have tested
controls attributable to the process of calculating expected credit
losses. In our examination of the loan portfolio, we also utilised
data analyses.
• We assessed the models and the key assumptions for calculat-
ing expected credit losses as well as tested the controls related
to the calculation process for expected credit losses. Our audit
procedures included an analysis of the most significant individual
impairments recognised during the financial period.
• Our IFRS and financial instruments specialists were involved in
the audit.
Bank of Åland Plc
Annual and sustainability report
• Furthermore, we considered the appropriateness of the notes
provided by the Bank of Åland in respect of loans and other
receivables and expected credit losses.
Net commission income and IT income (Accounting Principles
and Notes G and P)
• The assets managed by the Bank of Åland entitles to fee and com-
mission income on the grounds of the agreements entered into
with customers and the cooperation parties. The Group also derives
IT income based on customer agreements. Commissions and IT
income are a significant item in the Group’s income statement.
• The calculation of commissions and IT income comprises manual
phases and the determination of the commission amount and rev-
enue recognition may involve management judgement.
• Due to the significance of the income amount and the judgement
involved, net commission and IT income are considered a key
audit matter.
• We assessed the methods used by the Bank of Åland for calculation
of mutual fund and asset management commissions and IT income.
• Our review regarding the accounting of mutual fund and asset man-
agement commissions and IT income focused on controls in the bill-
ing and fee calculation processes. Our audit procedures involved an
assessment of the functionality and eectiveness of these controls.
• Our audit procedures included testing of commission calculations
on a sample basis, as well as an assessment of the underlying
related agreements and fund statutes where fees have been
defined. We utilised data analysis in our analysis of the charged fees.
Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for
the preparation of consolidated financial statements that give a true
and fair view in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU, and of financial statements
that give a true and fair view in accordance with the laws and regula-
tions governing the preparation of financial statements in Finland
and comply with statutory requirements. The Board of Directors and
the Managing Director are also responsible for such internal control
as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Board of Directors
and the Managing Director are responsible for assessing the parent
company’s and the Group’s ability to continue as going concern,
disclosing, as applicable, matters relating to going concern and using
the going concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting unless there is
an intention to liquidate the parent company or the Group or cease
operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit
of Financial Statements
Our objectives are to obtain reasonable assurance on whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assur-
ance, but is not a guarantee that an audit conducted in accordance
with good auditing practice will always detect a material misstate-
ment when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the finan-
cial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit
evidence that is sucient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an opinion on the
eectiveness of the parent company’s or the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of the Board of Directors’ and
the Managing Director’s use of the going concern basis of account-
ing and based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast
significant doubt on the parent company’s or the Group’s ability
to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our audi-
tors’ report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the
date of our auditors’ report. However, future events or conditions
may cause the parent company or the Group to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the finan-
cial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events so that
the financial statements give a true and fair view.
• Obtain sucient appropriate audit evidence regarding the financial
information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the
Group audit. We remain solely responsible for our audit opinion.
Bank of Åland Plc
Annual and sustainability report
Helsinki, February ,
Henry Maarala
Authorised Public Accountant, KHT
KPMG Oy Ab
Töölönlahdenkatu A
Helsinki
Sandra Eriksson
Authorised Public Accountant, KHT
KPMG Oy Ab
Töölönlahdenkatu A
Helsinki
Jessica Björkgren
Authorised Public Accountant, KHT
KPMG Oy Ab
Töölönlahdenkatu A
Helsinki
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with govern-
ance, we determine those matters that were of most significance in the
audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditors’ report
unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse con-
sequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
Employees of KPMG Oy Ab have served as auditors elected by the
Annual General Meeting since the spring of , representing an
uninterrupted engagement of years.
Other Information
The Board of Directors and the Managing Director are responsible for
the other information. The other information comprises the report of
the Board of Directors and the information included in in the Annual
Report. We have obtained the report of the Board of Directors and
the Annual Report prior to the date of this auditors’ report. Our opin-
ion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially incon-
sistent with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. With respect
to the report of the Board of Directors, our responsibility also includes
considering whether the report of the Board of Directors has been
prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Direc-
tors is consistent with the information in the financial statements and
the report of the Board of Directors has been prepared in accordance
with the applicable laws and regulations.
If, based on the work we have performed on the other information
that we obtained prior to the date of this auditors’ report, we conclude
that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Bank of Åland Plc
Annual and sustainability report
FIVEYEAR GROUP SUMMARY
Bank of Åland Group
EUR M
Net interest income . . . . .
Net commission income . . . . .
IT income . . . . .
Net income from financial items carried at fair value
. –. . . .
Other income . . . . .
Total income . . . . .
Sta costs –. –. –. –. –.
Other expenses –. –. –. –. –.
Statutory fees –. –. . . .
Derpreciation/amortisation and
impairment losses on tangible and intangible assets –. –. –. –. –.
Total expenses –. –. –. –. –.
Profit before impairment losses . . . . .
Impairment losses on loans
and other commitments –. –. –. –. –.
Net operating profit . . . . .
Income taxes –. –. –. –. –.
Profit for the report period . . . . .
Attributable to:
Non-controlling interests . . . . .
Shareholders in Bank of Åland Plc . . . . .
Volume
Lending to the public , , , , ,
Deposits from the public
, , , , ,
Actively managed assets
, , , , ,
Managed mortgage loans
,
Equity capital
Balance sheet total , , , , ,
Risk exposure amount , , , , ,
Financial ratios
Return on equity after taxes (ROE),
. . . . .
Expense/income ratio
. . . . .
Loan loss level,
. . . . .
Gross share of loans in stage ,
. . . . .
Liquidity coverage ratio (LCR),
Net stable funding ratio (NSFR),
Loan/deposit ratio,
Common equity Tier capital ratio,
. . . . .
Tier capital ratio,
. . . . .
Total capital ratio,
. . . . .
Leverage ratio,
. . . . .
Working hours re-calculated to full-time
equivalent positions
Earnings per share, EUR
. . . . .
Equity capital per share, EUR
. . . . .
Dividend per share, EUR
. . . . .
Actively managed assets encompassed managed assets in the Group’s own mutual
funds as well as discretionary and advisory securities volume plus external funds
with contractual earnings.
Total volume of mortgage loans in Borgo AB that the Bank of Åland manages through
various services.
Profit for the reporting period attributable to shareholders/Average shareholders’
portion of equity capital.
Expenses/Income.
Impairment losses on loan portfolio and other commitments from lending to
the public/Lending to the public at the end of the period.
Share of loans in stage /Gross lending to the public.
LCR assets at level and /-day net cash outflow.
Available stable funding/Stable funding requirement.
Lending to the public/Deposits from the public.
Common equity Tier capital/Risk exposure amount.
Tier capital/Risk exposure amount.
Own funds/Risk exposure amount.
Tier capital/Total exposure metric.
Shareholders’ portion of profit for the period/Average number of shares.
Shareholders’ portion of equity capital/Number of shares on closing day.
Proposed by the Board of Directors for approval by the Annual General Meeting.
Bank of Åland Plc
Annual and sustainability report
Corporate Governance Statement
Photographer: Anton Sucksdor
Bank of Åland Plc
Annual and sustainability report
Corporate Governance Statement
Corporate Governance Statement for the Bank of Åland Plc, financial year
The Corporate Governance Statement is being
issued as a separate report in conjunction with
the Report of the Directors for and was
prepared by the Audit Committee of the Board
of Directors.
Legislation and recommendations on
corporate governance
The Finnish Corporate Governance Code
(“the Code”), which is available on the website
www.cgfinland.fi, is intended to be followed by
companies listed on the Nasdaq OMX Helsinki
(“Helsinki Stock Exchange”). The Code is applied
according to the “comply or explain” principle,
which means that departures from its recom-
mendations must be disclosed and explained.
A company is regarded as complying with the
Code even if it departs from an individual rec-
ommendation, provided that it discloses and
explains the departure.
The Bank of Åland Plc (“the Bank”), which is
listed on the Helsinki Stock Exchange, is a pub-
lic company domiciled in Mariehamn, Finland.
The Bank is subject to legislation including the
Finnish Companies Act, the Credit Institutions
Act and the Securities Markets Act, as well as
the Bank’s Articles of Association and the
Code. The Corporate Governance Statement
has been prepared in compliance with the
Code’s reporting instructions and according to
the Finnish Securities Market Act, Chapter ,
Section . In applying the Code, the Bank
departs from Recommendation , “Appoint-
ment of Members to a Committee”, since the
Bank’s Compensation Committee includes
one co-opted member who is not a member
of the Bank’s Board of Directors. The co-opted
member is also Chairman of the Committee.
The purpose of this departure is to broaden
the Compensation Committee’s experience
and expertise base on compensation matters.
The need for outside expertise is assessed sep-
arately before each appointment date. On April
, , the Annual General Meeting of the
Bank of Åland approved departures from
Recommendation , “Nomination Committee”
and Recommendation , “Shareholders’
Nomination Board”. The Nomination Commit-
tee shall consist of the Chairman of the Board
plus representatives of the three shareholders
with the largest voting power in the Bank on
November of the respective year. If a share-
holder abstains from participating in the Nomi-
nation Committee, the right of membership is
transferred to the next largest shareholder.
This Corporate Governance Statement, the Articles of Association and other
disclosures required according to the Code are available at the Company’s website,
www.alandsbanken.fi.
Board of Directors
The members of the Board of Directors are elected by the shareholders at the Annual
General Meeting (AGM). The Board’s term of office ends at the closing of the next AGM
after the election. According to the Articles of Association, the Board shall consist of at
least five and at most eight members. During , the Board consisted of seven members.
The Managing Director may not be a member of the Board.
Composition of the Board,
Name, main occupation and education
Year of birth
Board members since
what year
Place of residence
Board members’
shareholdings in the Bank on
December , (direct
ownership or via companies
which the Board member
controls). There are no
shareholdings in other Bank of
Åland Group companies.
Nils Lampi, Chairman
CEO, Wiklöf Holding Ab
Bachelor of Economic Sciences
Born
Member since
Mariehamn, Åland
Series A shares:
Series B shares: ,
Christoer Taxell,
Deputy Chairman
Master of Laws
Born
Member since
Turku, Finland
Series A shares:
Series B shares: ,
Åsa Ceder
Master of Science in Economics
Actuary
Born
Member since
Mariehamn, Åland
Series A shares:
Series B shares:
Anders Å Karlsson
Business owner
Bachelor of Commerce
Born
Member since
Lemland, Åland
Series A shares: ,
Series B shares: ,
Mirel Leino-Haltia
PhD (Econ.), CFA
Born
Member since
Helsinki, Finland
Series A shares:
Series B shares:
Ulrika Valassi
Business owner
Master of Business Administration
Born
Member since
Stockholm, Sweden
Series A shares:
Series B shares:
Anders Wiklöf
Business owner
Doctor of Economics (honorary)
Commercial Counsellor
Born
Member since
Mariehamn, Åland
Series A shares: ,,
Series B shares: ,,
Bank of Åland Plc
Annual and sustainability report
’
In the assessment of the Board of Direc-
tors, the Chairman of the Board and all
other Board members are independent of
the Bank. Christoffer Taxell, Åsa Ceder,
Mirel Leino-Haltia and Ulrika Valassi are
also independent in relation to major
shareholders. Nils Lampi, Chairman of the
Board, is deemed to be dependent in rela-
tion to a major shareholder since he is CEO
of Wiklöf Holding, which is a major share-
holder in the Bank. Anders Wiklöf is
regarded as dependent in relation to a
major shareholder due to his direct and
indirect shareholding in the Bank. Anders
Å Karlsson is deemed to be dependent in
relation to a major shareholder in the Bank
since he is a Board member of Alandia
Försäkring Abp, which has a major share-
holding in the Bank.
The Board of Directors oversees the admin-
istration of the Bank’s affairs and is responsi-
ble for ensuring that its operations are
appropriately organised. The Board is also
responsible for overall policy and strategy
issues and for ensuring that risk oversight is
sufficient and that management systems are
working. The duties of the Board also
include appointing and, if necessary, dis-
missing the Managing Director, his deputy
and other members of the Executive Team,
as well as deciding their salary benefits and
other employment conditions. The Board
shall constitute a quorum when more than
half its members are present.
The Board has established Group-wide
internal Rules of Procedure for its work.
These Rules of Procedure, which are evalu-
ated annually and revised as needed, mainly
regulate the division of labour between the
Board, the Managing Director and other
members of the Executive Team. The Rules
of Procedure also regulates meeting proce-
dures, minutes of meetings and reporting
procedures. The Board of Directors, which
meets after being convened by the Chair-
man of the Board, regularly discusses the
economic situation in the financial markets.
Supported by the Managing Director’s
recurrent reports on operational activities,
the Board monitors the strategy, financial
outcomes and overall long-term objectives
of the Bank’s operations. Beyond this, the
Board deals with other matters raised in
compliance with the Annual Accounts Act,
the Articles of Association and other regula-
tions that affect the Bank’s operations and
administration, as well as matters referred
by individual Board members and by the
Executive Team.
The Board of Directors conducts a yearly
internal evaluation of its performance and
its work. The evaluation includes a question-
naire in which each Board member assesses
the work of the Board during the year.
The Chairman of the Board also has individ-
ual conversations with each Board member.
Led by the Chairman of the Board, the evalu-
ation is also discussed and dealt with at a
subsequent Board meeting, and decisions
are made on actions to be taken as a result
of the evaluation.
During , the Board held () meet-
ings. The Board members’ average attend-
ance was () per cent. During ,
each Board member attended Board and
committee meetings as follows:
Attendance at Board meetings,
Board member
Board meetings
Total number:
Nils Lampi /
Christoer Taxell /
Åsa Ceder /
Anders Å Karlsson /
Mirel Leino-Haltia /
Ulrika Valassi /
Anders Wiklöf /
Board member since the AGM on March , .
According to the Credit Institutions Act and
the Code, the Board shall establish principles
for promoting diversity in the composition
of the Board and have as a goal of the credit
institution that both genders shall be equally
represented on the Board. The Bank of
Åland seeks a good balance in the composi-
tion of the Board, with the aim that the
Board as a whole shall possess the expertise
and experience required to monitor and
develop the Company. Achieving this goal
requires that as a group, the Board possesses
a breadth in terms of education, personal
qualities, experience, gender and age.
Allocation between genders shall be equal,
and both genders shall thus be represented
in the proposal that is presented on the
occasion of each nomination as a new
Board member. During the financial year,
the members of the Board have collectively
achieved the variation in education, experi-
ence and talents required for the task. Both
genders are represented on the Board, with
the allocation between the genders being
per cent women and per cent men.
Bank of Åland Plc
Annual and sustainability report
The committees of the Board
The main duty of the Nomination
Committee is to prepare proposals before
the AGM regarding the election of Board
members as well as proposals concerning
fees to the Chairman, Vice Chairman and
other Board members.
Rules on how the Nomination Committee
is appointed were established by the
AGM. The Nomination Committee consists
of four members: the Chairman of the Board
and representatives of the three largest
shareholders in the Bank in terms of voting
power on November of each year. If the
Chairman of the Board represents any of the
above shareholders, or in case a shareholder
abstains from participating in the Nomination
Committee, the right of membership is
transferred to the next largest shareholder.
The representative of the largest shareholder
in terms of voting power is Chairman of the
Nomination Committee.
The Nomination Committee consists of
Nils Lampi, Chairman of the Board; Board
member Anders Wiklöf, by virtue of direct
and indirect personal shareholdings; Stefan
Björkman, representing the insurance com-
pany Alandia Försäkring Abp; and Georg
Ehrnrooth, representing Fennogens Invest-
ments S.A. Anders Wiklöf is Chairman of
the Nomination Committee.
During the Nomination Committee
met () times. The average attendance of
Committee members was () per cent.
Attendance at Nomination
Committee meetings,
Member
Nomination Committee
meetings
Total number:
Anders Wiklöf,
Chairman of the
Committee
/
Nils Lampi /
Stefan Björkman /
Georg Ehrnrooth /
The Board of Directors, which appoints
the members of the Audit Committee, has
established its duties in Rules of Procedure.
The Audit Committee assists the Board,
among other things, in fulfilling its duties
in overseeing the internal control and risk
management systems, reporting, the audit
process and observance of laws and regula-
tions. In addition, before the AGM the Audit
Committee prepares proposals for the elec-
tion of auditors and their fees. The Chairman
of the Audit Committee reports regularly to
the Board about the work and observations
of the Committee.
The Audit Committee consists of Nils
Lampi, Chairman of the Board; and Board
members Anders Å Karlsson, Mirel Leino-
Haltia and Ulrika Valassi, Chairman of the
Audit Committee. During the Audit
Committee met () times.
The average attendance of Committee
members was () per cent.
Attendance at Audit Committee
meetings,
Member
Audit Committee
meetings
Total number:
Ulrika Valassi,
Chairman of the
Committee
/
Anders Å Karlsson /
Mirel Leino-Haltia /
Nils Lampi /
Member of the Audit Committee since the AGM on
March , .
The duties of the Compensation Committee
are to prepare key compensation-related
decisions and evaluate the Bank’s compen-
sation policy and the principles for variable
compensation. The Compensation Commit-
tee decides on measures for monitoring the
application of the principles for the compen-
sation system and assesses its suitability
and effect on the Group’s risks and risk
management.
The Compensation Committee consists
of Nils Lampi, Chairman of the Board;
Board member Christoffer Taxell; and
Agneta Karlsson as a co-opted member
and Chairman of the Committee.
During the Compensation
Committee met () times. The average
attendance of Committee members was
() per cent.
Attendance at Compensation
Committee meetings,
Member
Audit Committee
meetings
Total number:
Agneta Karlsson,
Chairman of the
Committee
/
Nils Lampi /
Christoer Taxell /
Bank of Åland Plc
Annual and sustainability report
Managing Director
The Managing Director of the Bank is
Peter Wiklöf, Master of Laws (born ).
The Managing Director’s shareholdings
in the Bank can be seen in the table to
the right.
Among other things, the Managing
Director is responsible for the day-to-day
administration of the Bank and for ensuring
that this is managed in compliance with law,
the Articles of Association, other regulations
and the instructions and directions of the
Board. In addition, the Managing Director is
responsible for ensuring that the decisions
of the Board are implemented.
The Managing Director reports regularly
to the Board. The Managing Director is
appointed and dismissed by the Board of
Directors. His employment conditions are
established in a written contract that is
approved by the Board.
The Group’s Executive Team
– other members
The Board appoints the other members of
the Group-wide Executive Team. The other
members of the Executive Team advise the
Managing Director, and the Executive Team
deals with all major Bank-wide issues. The
Executive Team consists of the heads of the
Bank’s business areas and corporate units.
Their shareholdings in the Bank can see
seen in the table below.
During the Executive Team met on
() occasions.
,
,
The Group-wide Executive Team,
Composition of the Executive Team and
its members’ areas of responsibility
Education
Year of birth
Executive Team member
since what year
Shareholdings in the Bank
on December , (direct
ownership or via companies
which the person controls).
There are no shareholdings
in other Bank of Åland Group
companies.
Peter Wiklöf
Managing Director,
Chief Executive
Chairman of the Executive Team
Master of Laws
Born
Member since
Series A shares:
Series B shares: ,
Jan-Gunnar Eurell
Chief Financial Ocer
Deputy Managing Director
Bachelor of Science
(Economics)
Master of Business
Administration
Born
Member since
Series A shares:
Series B shares: ,
Tove Erikslund
Chief Administrative Ocer
Master of Business
Administration
Born
Member since
Series A shares:
Series B shares: ,
Sofie Holmström
Manager, Partnerships
Business Area
Master of Science, IT
Management
Bachelor of Commerce,
Business Administration
Born
Member since
Series A shares:
Series B shares: ,
Magnus Johansson
Director, Sweden Business Area
Bachelor of Science
(Economics)
Born
Member since
Series A shares:
Series B shares: ,
Mikael Mörn
Director, Åland Business Area
Associate of Arts in
Commerce
Born
Member since
Series A shares:
Series B shares: ,
Juhana Rauthovi
Chief Risk & Compliance Ocer
Licentiate in Laws, M.Sc.
(Econ.), M.Sc. (Tech.)
Master in International
Management
Born
Member since
Series A shares:
Series B shares: ,
Anne-Maria Salonius
Director, Finnish Mainland
Business Area
Master of Laws
Attorney at Law
Born
Member since
Series A shares:
Series B shares: ,
The Board of Directors, led by the Chairman of the Board, evaluates the work of the Managing
Director and the rest of the Executive Team yearly. The Managing Director and other mem-
bers of the Executive Team do not attend this evaluation.
Bank of Åland Plc
Annual and sustainability report
Internal controls and risk
management systems related to
thefinancial reporting process
Internal controls and risk management in
the financial reporting process are an inte-
gral element of operational systems and
daily routines. To achieve this integration,
the Group employs clear and easily accessi-
ble internal instructions. In developing new
systems, products, services and/or routines,
internal controls are taken into account. The
organisation has clearly defined responsibili-
ties and powers as well as clear reporting
mechanisms.
The fundamental principles of internal con-
trols in the financial reporting process are
a clear allocation of roles as well as instruc-
tions and an understanding of how financial
results are achieved.
The Group’s reporting is compiled cen-
trally by Group Finance. This department is
responsible for the consolidated accounts
and the consolidated financial statements,
accounting principles, policy documents and
instructions, financial control systems, tax
analysis, reporting to regulatory authorities
and publication of financial information.
The respective subsidiaries are responsible
for ensuring that their accounts meet the
Group’s standards, and they report monthly
to their company’s management and
Group Finance.
The Internal Auditing Department assists
the external auditors with the examination
of financial information in accordance with
an audit plan drawn up in advance. Internal
Auditing is an independent unit and works
on behalf of the Board of Directors.
External auditors examine the Group’s
interim reports, half-year financial report,
Annual Report and Corporate Governance
Statement and submit an auditors’ report to
the Audit Committee and to the Group’s
Board of Directors.
The Group’s Executive Team deals with
the Group’s internal financial reporting
every month and with the interim reports,
half-year financial report or the Annual
Report every quarter.
The Audit Committee assists the Board in
its continuous monitoring work by examin-
ing the quarterly financial reports, the half-
year financial report and the annual financial
statements, as well as dealing with the obser-
vations of the external and internal auditors.
The Board of Directors deals with interim
reports, the half-year financial report or the
Annual Report every quarter and receives
the Group’s internal financial reporting
every month. The Board also examines the
auditors’ reports, audit plans and conclu-
sions of the external auditors concerning
interim reports, the half-year financial report
and the Annual Report. The Board meets
with the external auditors at least quarterly.
The Group’s ambition is to pursue its opera-
tions with reasonable and carefully consid-
ered risks. Its profitability directly depends
on the ability of the organisation to identify,
manage and price risks. The purpose of risk
management is to reduce the probability of
unforeseen losses and/or threats to the
Group’s reputation as well as contribute to
higher profitability and shareholder value.
The Group is exposed to credit risk, coun-
terparty risk, market risk, liquidity risk, opera-
tional risk and business risk. The latter is
a consequence of the Group’s strategy,
competitiveness, ability to adapt to customer
expectations, unfavourable business deci-
sions and the environment and market the
Group works in. Business risk is managed in
conjunction with strategic planning. Credit
risk, which is the Group’s most significant risk,
encompasses receivables from private indi-
viduals, companies, institutions and the pub-
lic sector. These receivables mainly consist of
loans, overdraft facilities and guarantees
issued by the Bank.
The Board of Directors has overall respon-
sibility for governance and monitoring, that is,
for ensuring that risk management is suffi-
cient and for establishing systems and regula-
tions for monitoring and limiting the Bank’s
risk exposure. The Audit Committee assists
the Board in handling these oversight tasks in
internal control systems, risk management
and reporting. The Managing Director over-
sees and supervises business operations in
accordance with the Board’s instructions, is
responsible for day-to-day administration and
for ensuring that the members of the Board
receive sufficient information regularly about
the Group’s risk positions and the regulations
that affect its operations.
The Bank works according to an allocation
of responsibility between three different lines
of defence, in which each part of its business
operations within the first line of defence
bears responsibility for its business and for
managing its risks. Within the second line of
defence, the Risk Office Corporate Unit is
responsible for independent risk monitoring
(financial risks) and operational risks (among
other things compliance with regulations).
The Risk Office Corporate Unit is also respon-
sible for the credit approval process. This
includes identifying, measuring, analysing
and reporting all of the Group’s significant
risks as well as examining the loan matters
presented to the Credit Committee of the
Executive Team. The Risk Office is also
responsible for data protection as well as
informational and corporate security in the
Group. The corporate unit also ensures that
risks and risk management live up to the
Bank’s risk appetite and risk tolerance and
that the management of the Bank regularly
receives reports and analyses on the current
situation. Within the third line of defence,
the Risk Office is audited by the Internal
Auditing Department, which evaluates risk
management both in terms of sufficiency
and compliance.
In addition to the regulations and instruc-
tions of the Finnish Financial Supervisory
Authority and national legislation, the main
foundations of the Group’s risk management
are numerous directives and regulations at
the European Union level. For more detailed
information on the Group’s risk management,
capital management, evaluation of capital
requirements and capital adequacy informa-
tion, see the Capital and Risk Management
Report for . The report is posted on the
Bank’s website, www.alandsbanken.fi.
At the Bank, the Private Banking and Pre-
mium Banking units in Åland, on the Finnish
mainland and in Sweden bear responsibility
for lending via mandates. Those employees
who work with lending have personal loan
granting limits for the customers that they
are responsible for. In Åland there is also a
corporate lending unit. Responsibility for
lending rests with the management of each
Bank of Åland Plc
Annual and sustainability report
respective unit along with those responsible
for customers according to the above-
mentioned structure. If decisions regarding
larger loans are needed, there is a Credit
Committee for operations in Finland and
one for operations in Sweden. In addition,
there is a Credit Committee of the Executive
Team for credit matters that cannot be
decided by the country-specific units due
to their size. The largest commitments are
decided by the Bank’s Board of Directors.
During the Bank transferred to the
mortgage company Borgo AB the majority
of the mortgage portfolio that was built up
via partnerships. Part of the Bank’s own
mortgage loans were also transferred to
Borgo AB. As a result of this collaboration,
part of the new mortgage loans that the
Bank provides to its customers will be
issued by Borgo AB.
Independent monitoring and assessment of
the Bank’s compliance with regulations is
managed by the Group’s Compliance
department, with a focus on customer pro-
tection, behaviour in the market, combating
money laundering and the financing of ter-
rorism as well as permitting and regulatory
matters. The Compliance department regu-
larly reports its observations to the Bank’s
Executive Team and Board of Directors.
Internal Auditing
The Internal Auditing department is an
independent department that reports
directly to the Board of Directors.
The purpose of internal auditing work
is to provide the Board and the Executive
Team with objective and independent
assessments of operational activities, opera-
tional business and management processes
and the Group’s risk management, govern-
ance and controls. Internal Auditing reports
regularly to the Board, the Audit Committee
and the Executive Team. The Board adopts
a yearly plan for internal auditing work.
Special decision-making procedure
concerning related party transactions
Decisions on loans to related parties are
made by the Bank’s Board of Directors.
Regulations for related
party transactions
The Bank has established internal regula-
tions for identification and decision-making
concerning transactions with related parties.
The internal regulations govern such matters
as identification, reporting and oversight
of related party transactions as well as the
decision-making process and management
of conflicts of interest.
Insider administration
In their capacities as an investment firm and
a fund management company, respectively,
the Bank of Åland and its subsidiary Ålands-
banken Fondbolag maintain insider registers
in compliance with the Act on Investment
Services or the Act on Mutual Funds.
In its capacity as a listed company, the
Bank only maintains project-specific insider
lists. These project-specific insider lists are
established immediately when information
that the Bank, in compliance with applicable
regulations, deems to be insider information
arises. Persons included on project-specific
insider lists are prohibited from trading in
the Bank’s financial instruments as long as
they are included on such a list.
The Bank does not maintain any perma-
nent insider list, or any list of persons who
participate in the preparation of interim
reports and annual accounts. Persons dis-
charging managerial responsibilities at the
Bank and persons closely associated with
them are obligated to immediately report
their transactions in the Bank’s financial
instruments. The Bank publishes stock
exchange releases on these transactions.
In accordance with the EU’s Market
Abuse Regulation and the insider regula-
tions of the Nasdaq Helsinki Oy (the Helsinki
Stock Exchange), the Bank of Åland Group
has introduced a trading restriction, under
which persons in management positions as
well as all Group employees may not trade
in the Bank’s financial instruments during a
-day period before and including the pub-
lication date of the Bank’s financial reports.
The trading restriction also includes minors
for whom persons in management positions
or Group employees are guardians, as well
as organisations in which people in manage-
ment positions or Group employees have
a controlling influence.
The Bank observes a silent period of
three weeks prior to the publication of an
interim report, half-year financial report or
year-end report.
For employees who participate in provid-
ing investment services, the Bank also
applies Group-wide trading restrictions that
are based on the trading rules established
by such professional organisations as
Finance Finland, the Swedish Securities
Dealers Association and the Swedish Invest-
ment Fund Association.
The Bank’s Legal Affairs department
regularly monitors information reported to
the insider register and insider lists, as well
as information about people in manage-
ment positions and their related parties.
The Bank’s Compliance department regu-
larly monitors employee compliance with
the trade restrictions in force.
Auditors
According to its Articles of Association, the
Bank shall have at least three auditors and
the necessary number of deputies for them.
An auditor is appointed yearly at the Annual
General Meeting (AGM) for the period up to
the end of the next Annual General Meeting.
The latest AGM in re-elected
Fredrik Westerholm, CGR, and Henry
Maarala, CGR, as auditor. It also elected
Sandra Eriksson, CGR, as auditor. The firm
of KPMG Oy Ab was re-elected as deputy
auditor.
During , Group companies paid
a total of EUR , (,) including
value-added tax for auditing fees. In addi-
tion, they paid EUR , (,)
including VAT for consulting assignments
performed by KPMG Oy Ab.
Compensation to the Board,
Managing Director and other
Executive Team members
The Bank’s compensation statement, includ-
ing its compensation report for , has
been published in Swedish and Finnish on
the Bank’s website, www.alandsbanken.fi.
Bank of Åland Plc
Annual and sustainability report
Board of Directors
Anders Å Karlsson
Business owner
Bachelor of Commerce
Born
Board member since
Nils Lampi
CEO, Wiklöf Holding Ab
Bachelor of Economic Sciences
Born
Chairman of the Board since
Board member since
Christoffer Taxell
Master of Laws
Born
Deputy Chairman of the Board since
Board member since
Åsa Ceder
Business owner
Master of Science in Economics
Actuary
Born
Board member since
Bank of Åland Plc
Annual and sustainability report
Anders Wiklöf
Business owner
Doctor of Economics (honorary), Commercial Counsellor
Born
Board member since
Ulrika Valassi
Business owner
Master of Business Administration
Born
Board member since
Further information in Swedish and Finnish about the members of the Board can be found on the Bank’s website www.alandsbanken.fi
Mirel Leino-Haltia
PhD (Econ.), CFA
Born
Board member since
Bank of Åland Plc
Annual and sustainability report
Executive Team
Jan-Gunnar Eurell
Chief Financial Officer. Deputy Managing Director
Master of Business Administration, Bachelor of Science (Economics)
Born
Member of the Executive Team since
Tove Erikslund
Chief Administrative Officer
Master of Business Administration
Born
Member of the Executive Team since
Peter Wiklöf
Managing Director. Chief Executive
Master of Laws
Born
Chairman and member of the Executive Team since
Magnus Johansson
Director, Sweden Business Area
Bachelor of Science (Economics)
Born
Member of the Executive Team since
Bank of Åland Plc
Annual and sustainability report
Juhana Rauthovi
Chief Risk & Compliance Officer
Licentiate in Laws, MSc (Econ), MSc (Tech),
Master in International Management
Born
Member of the Executive Team since
Anne-Maria Salonius
Director, Finnish Mainland Business Area
Attorney at Law, Master of Laws
Born
Member of the Executive Team since
Further information in Swedish and Finnish about the members of the Executive Team can be found on the Bank’s website www.alandsbanken.fi
Mikael Mörn
Director, Åland Business Area
Associate of Arts in Commerce
Born
Member of the Executive Team since
Sofie Holmström
Manager, Partnerships Business Area
Master of Science, IT Management
Bachelor of Commerce, Business Administration
Born
Member of the Executive Team since
Bank of Åland Plc Annual and sustainability report
Definitions
Managed assets in the Bank’s own mutual funds plus securities
custodial accounts with discretionary and advisory asset
management agreements.
Alternative performance measures are financial metrics of historical
or future earnings developments, financial position or cash flow that
have not been defined in applicable accounting regulations (IFRSs)
or capital requirements regulations (CRD/CRR).
The Bank of Åland uses alternative performance measures
when they are relevant in order to monitor and describe the Bank’s
financial situation, to facilitate comparability between periods and
to provide additional usable information to the readers of its
financial reports.
These measures are not necessarily comparable to similar
financial metrics that are presented by other companies.
Own funds divided by risk exposure amount.
Chemical designation for carbon dioxide.
e
Carbon dioxide equivalents, collective term for the environmental
impact of the most common greenhouse gases recalculated into
carbon dioxide.
()
Equity capital excluding proposed dividend, deferred tax and
intangible assets and certain other adjustments according to the
European Union’s Capital Requirements Regulation No. /
(CRR).
()
Common equity Tier (CET) capital divided by risk exposure
amount. Replaces “core Tier capital” concept.
Shareholders’ portion of earnings for the period divided by average
number of shares.
(e)
Employees’ propensity to recommend the Bank of Åland. Calculated
on a scale of –, where the percentage of negative responses
(–) is subtracted from the percentage of positive responses
(–).
/
Equity capital as a percentage of balance sheet total.
Shareholders’ portion of equity capital divided by number of shares
less own shares on closing day.
()
The present value of expected future credit (loan) losses on finan-
cial assets. ECL is a product of PD, LGD and exposure at default.
/
Total expenses divided by total income.
/
Greenhouse Gas Protocol, a global procedure and standard for
calculating greenhouse gas emissions.
/
Tier capital divided by balance sheet total plus certain off-balance
sheet items recalculated using conversion factors defined in the
standardised approach.
,
Gross lending to the public in Stage , divided by lending to
the public before provisions for impairment losses.
Net interest income as percentage of average
balance sheet total.
Provisions for impairment losses in Stage as a percentage of gross
lending to the public in Stage .
()
High-quality liquid assets as a percentage of estimated net liquidity
outflow during a -day period.
/
Lending to the public divided by deposits from the public.
Net impairment losses on loan portfolio and other commitments in
lending to the public divided by lending to the public at the begin-
ning of the period.
()
LGD specifies the percentage of loss in an exposure, in the event of
a default.
()
Propensity to recommend the Bank of Åland. Calculated on a scale
of –, where the percentage of negative responses (–) is sub-
tracted from the percentage of positive responses (–).
()
Available stable funding as a percentage of necessary stable funding.
( )
Total of Tier capital and Tier (supplementary) capital.
Dividend per share as a percentage of earnings per share.
()
The probability that a counterparty or a contract will default within
months.
()
Profit for the report period attributable to shareholders divided by
average shareholders’ portion of equity capital.
Assets and off-balance sheet commitments, risk-weighted according
to capital adequacy regulations for credit risk and market risk.
Operational risks are calculated and expressed as risk exposure.
Common equity Tier (CET) capital including certain loss-absorbing
subordinated debentures (“additional Tier capital”).
()
Mainly subordinated debentures that do not meet requirements to
be included as additional Tier capital.
Average of end-of-month figures.
Bank of Åland Plc Annual and sustainability report
January , The Bank of Åland will transfer most of its Swedish
mortgage portfolio to Borgo AB
January , Ålandsbanken Abp announces amendment of terms
and conditions for its Covered Bonds due
February , Bank of Åland Plc: Year-end Report for the period
January–December
February , Ålandsbanken Abp announces timeline and measures
in conjunction with the issuer change of covered bonds
February , Bank of Åland Plc: The transfer of Swedish mortgage
loans and covered bonds from the Bank of Åland Plc to
Borgo AB has been implemented
February , The Annual Report of the Bank of Åland Plc has
been published
February , Bank of Åland’s targeted share issues for implementa-
tion of the variable compensation system for
members of the Executive Team and key individuals
March , Managers’ Transactions (Erikslund)
March , Managers’ Transactions (Eurell)
March , Managers’ Transactions (Wiklöf)
March , Managers’ Transactions (Rauthovi)
March , Managers’ Transactions (Mörn)
March , Managers’ Transactions (Salonius)
March , Managers’ Transactions (Johansson)
March , Managers’ Transactions (Holmström)
March , Bank of Åland Plc to annul own shares held by
the Company
March , Bank of Åland Plc: Decisions at the Annual
General Meeting of the Bank of Åland Plc
(Ålandsbanken Abp)
April , Bank of Åland Plc: Interim Report for the period
January–March
April , Bank of Åland Plc launches share savings programme
for employees
April , Managers’ Transactions (Eurell)
June , Bank of Åland Plc to increase prime rate
July , Bank of Åland Plc: Standard & Poor’s raises credit
rating of Bank of Åland Plc
July , Bank of Åland Plc: Half-Year Financial Report for
the period January–June
September , Bank of Åland Plc to increase prime rate
September , Managers’ transactions (Lampi)
October , Carola Nilsson new Managing Director of
Ålandsbanken Fondbolag Ab
October , Bank of Åland Plc: Interim Report for the period
January–September
October , Managers’ transactions (Lampi)
October , Bank of Åland Plc: Financial information and Annual
General Meeting,
November , Ålandsbanken Abp: Notification of an application for
the admission of the second tranche of a security to
trading in a regulated market
November , The Bank of Åland has repurchased , of its
own shares
December , Bank of Åland discontinues buy-backs of own shares
December , Bank of Åland Plc to annul own shares held by
the Company
In addition, during the periods February –March and May –
December , , the Bank carried out buy-backs of its own shares on
a regular basis and published stock exchange releases about them, but
not in English.
Stock exchange releases,
The Bank of Åland Plc’s list of stock exchange releases in
Bank of Åland Plc Annual and sustainability report
Address list
Bank of Åland Plc
Mariehamn
Street address: Nygatan
Postal address: PB
AX- Mariehamn
Åland, Finland
Telephone
city@alandsbanken.ax
Finström
Von Knorringsvägen
AX- Finström
Åland, Finland
Telephone
Kumlinge
– cooperation with Åland Post
Kumlingeby
AX- Kumlingeby
Åland, Finland
Telephone
Kökar
– cooperation with Åland Post
Karlby
AX- Karlby
Åland, Finland
Telephone
www.alandsbanken.ax
Helsinki
Bulevardi
FI- Helsinki, Finland
Telephone
Bulevardi
FI- Helsinki, Finland
Telephone
Tampere
Hämeenkatu
FI- Tampere, Finland
Telephone
tammerfors@alandsbanken.fi
Vaasa
Hovioikeudenpuistikko
FI- Vaasa, Finland
Telephone
vasa@alandsbanken.fi
Turku
Hansakortteli
Eerikinkatu
FI- Turku, Finland
Telephone
abo@alandsbanken.fi
Parainen
Kauppiaskatu
FI- Parainen, Finland
Telephone
pargas@alandsbanken.fi
Oulu
Kirkkokatu B, rd floor
FI- Oulu, Finland
Telephone
www.alandsbanken.fi
ÅLANDSBANKEN
FONDBOLAG AB
Mariehamn
PB
AX- Mariehamn
Åland, Finland
Telephone
CROSSKEY BANKING
SOLUTIONS AB LTD
Mariehamn
Elverksgatan
AX- Mariehamn
Åland, Finland
Telephone
Helsinki
Unionin katu
FI- H elsinki
Telephone
Turku
Lemminkäisenkatu
FI- Turku, Finland
Telephone
information@crosskey.fi
www.crosskey.fi
Stockholm
Rådmansgatan
SE- Stockholm, Sweden
Telephone
information@crosskey.se
www.crosskey.se
Stockholm
Stureplan
SE- Stockholm, Sweden
Telephone
Gothenburg
Kungsportsavenyen
SE- Gothenburg, Sweden
Telephone
goteborg@alandsbanken.se
Malmö
Carlsgatan
SE- Malmö, Sweden
Telephone
malmo@alandsbanken.se
www.alandsbanken.se