Achmea Bank reports a profit of 11 million before tax
• Achmea Bank N.V. reports a profit before tax of EUR 11 million for the first half-year 2022 (EUR 33 million for the first half-year 2021)
• The capital position remains strong at 20.1% (December 2021: 20.9%)
• The Bank issued a second EUR 0.5 billion tranche under its EUR 5 billion Soft Bullet Covered Bond Programme
The operating profit decreased from EUR 33 million in the first half-year of 2021 to EUR 11 million in the first half-year of 2022, mainly due to a lower interest margin of EUR 14 million, lower operating expenses (EUR 2 million) and a higher fair value result (EUR 3 million). The impairment charge in the first half-year of 2022 results in an addition of EUR 2 million (2021 EUR 11 million release).
Since the end of Q4 2021 the macro-economic environment has changed, resulting in high inflation, increases in interest rates and credit spreads. Lower gross margin on the current mortgage portfolio results in a lower interest margin. Underlying, we see a positive development, expressed in an increase of both the mortgage production and margins on new mortgages compared to the same period last year. The mortgage production increased with EUR 0.2 billion to EUR 0.6 billion in the first half of 2022 (EUR 0.4 billion in first half of 2021). Combined with prepayments of EUR 0.8 billion and an acquired portfolio from a.s.r. (EUR 0.2 billion), the mortgage portfolio of Achmea Bank remained stable to EUR 11.1 billion. In July 2022 Achmea Bank acquired a 2nd portfolio of Dutch residential mortgages of EUR 0.4 billion from a.s.r.
In the first half-year of 2022, the impairment charge amount to EUR 2 million (2021 EUR 11 million release). The 2021 release included incidental effects of EUR 6 million related to the implementation of a second generation IFRS 9 risk model. A deterioration of the macro-economic situation and outlook in the first half-year of 2022 results in an addition to the loan loss provision. The number of defaults remained at a low level, which reflects the inherent low credit risk profile of the mortgage portfolio of Achmea Bank.
The fair value result of EUR 8 million (2021 EUR 5 million) is an accounting result that is mainly compensated in other reporting periods, generally reflecting a pull to par as the underlying derivatives (used for hedging interest rate risk) approach maturity.
In May 2022, the Bank issued a second EUR 0.5 billion tranche under its EUR 5 billion Soft Bullet Covered Bond Programme, which was originally established in 2021. The Bank has a diversified funding mix, comprising retail funding as well as unsecured and secured wholesale funding. The Bank retained its sound liquidity position with liquidity ratios well above internal and external limits. In addition the Bank maintains different maturity profiles in its funding instruments.
The Common Equity Tier 1 (CET1) decreased to 20.1% (2021: 20.9%). This decrease is mainly due to higher mortgage origination and related outstanding loan commitments. In April 2022, Achmea Bank paid a EUR 42 million dividend to its shareholder Achmea B.V. , the 2021 net distributable profit.
S&P confirmed the Issuer Credit Rating Outlook per 8 March 2022 of A-/stable and Fitch confirmed the issuer Default Rating of A/Stable per 23 June 2020.
We follow closely the geopolitical situation and the effects thereof on the financial markets and on our clients and their financial (payment) capacity. Next to the situation in Ukraine we are closely monitoring other uncertain situations i.e. inflation, interest and covid. Managing uncertainty is an inherent part of our line of business. Our capital and liquidity position, together with our risk management system, are safeguards to possible second order effects.
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