Aktia Bank PLC

The stable outlook indicates that we expect Aktia Bank to preserve a sound financial position over the next two years and to build up a material bail-in-able buffer consisting of senior nonpreferred and Tier 2 capital instruments that would provide protection to senior debtholders in a resolution scenario. Indeed, we expect the bank to successfully enter the senior nonpreferred market within the next 12 months. Clarity about Aktia Bank's potential subordination requirement on its minimum requirement for own fund and eligible liabilities (MREL) could further strengthen its additional loss-absorbing capacity (ALAC) buffer. We could lower the ratings if we see a lower likelihood that Aktia Bank will sustain an ALAC buffer above our adjusted 4% threshold by issuing senior nonpreferred

...We believe the expansion of Aktia Bank's wealth management operations will be a key driver of business and earnings growth over the next two years, if integrated successfully. The acquisition of Taaleri's wealth management operations will provide Aktia Bank with diversification benefits and cross-selling opportunities. The growing share of fee-income in the business mix also has the potential to lift profitability to gradually meet its ambitious key financial targets set for 2025. We expect Aktia Bank's sound earnings generation to support capital build-up and restore our risk-adjusted capital (RAC) ratio over the next 24 months. Capital levels have melted following the acquisition of Taaleri's wealth management operations in 2021, but not to the extent that it changed our strong capital and earnings assessment. In our opinion, Aktia Bank's capital position remains a rating strength and we project the RAC ratio will increase to...

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