Alandsbanken (Bank of Aland) is a niche Nordic private- and premium-banking franchise - founded 1919, listed since 1942 - serving entrepreneurs and wealthy families across Aland, Finnish-mainland and Swedish branches, plus a wholly-owned banking-IT subsidiary, Crosskey Banking Solutions, which just went live with a multi-bank platform for the POP Bank Group in Finland. The niche positioning and dual-class, family-anchored ownership (Wiklof family 21.6% of shares / 29.8% of votes) keep the model simple to underwrite even as the IT arm adds a second, fee-based income stream.
LTM H1 2026 ROE is 16.46% (ROTE 17.88%) on a strong 12.8% CET1 ratio and near-zero credit losses (net recoveries in H1 2026, gross Stage-3 share down to 1.41%) - a genuine, multi-year (12.8-17.9% ROE, 2021-2025) spread over our ~9.5% cost-of-equity assumption. The one crack: H1 2026 net operating profit fell 14% YoY as a weak associated-company swing and 5% expense growth outpaced flat core income, nudging cost/income to ~0.71 from 0.69 in FY2025.
Capital return improved this year with the first semi-annual dividend (EUR0.75/share, up to 50% of H1 profit) layered on the existing annual payout (77.5% of FY2025 profit) - funded entirely from CET1 surplus, no balance-sheet strain. On the ROE/Gordon P/B frame, though, the Series B shares already trade slightly above what a conservative sustainable-ROE assumption justifies.
Gordon fair P/B = (ROE-g)/(Ke-g) with Ke 9.5%, g 3%: at the LTM 16.46% ROE fair value is ~2.07x book (~EUR40.65); at a more conservative 15.5% sustainable-ROE assumption (between the company's own >15% long-term target and the 5y realized range) fair value is ~1.92x book (~EUR37.75). Either way the current EUR43.0 (2.19x book, 2.38x tangible book) sits at or slightly above the justified range - no margin of safety.
Base EUR38 (15.5% sustainable ROE, roughly flat to slightly down); bull EUR45 (ROE reverts to the FY2025 record 17.8% as AUM/IT compounding continues); bear EUR30 (ROE reverts toward the 2022 trough 12.8% on a deeper rate/cost squeeze).
Residual-income panel unavailable: non-positive book equity.
| Scenario | 24m target | Upside | Prob. | Driver |
|---|---|---|---|---|
| Bull | €45 | +5% | 25% | ROE reverts to the FY2025 record 17.8% on AUM/IT compounding |
| Base | €38 | -12% | 45% | 15.5% sustainable ROE; roughly flat to down from EUR43.0 |
| Bear | €30 | -30% | 30% | ROE reverts toward the 2022 trough 12.8% on a deeper rate/cost squeeze |
| Prob-weighted | €37 | -13% | 100% | Scenario-weighted expected value |
Relationship banking for entrepreneurs and wealthy families across Aland/Finland/Sweden - a differentiated model versus universal Nordic banks.
Actively managed assets hit a record EUR12.1bn (+14% FY2025) and EUR12.4bn in Q2 2026 - fee income compounds even as NII cycles down.
Banking-IT subsidiary now serving the POP Bank Group in Finland (live June 2026) - a second, fee-based growth engine beyond the core bank.
New semi-annual dividend (EUR0.75/sh, up to 50% of H1 profit) layered on an already well-covered annual payout (77.5% FY2025), funded from CET1 surplus.
Gross Stage-3 share down to 1.41% (1.58% FY2025) and H1 2026 net recoveries - asset quality still improving through the cycle.
Alandsbanken's Series B shares represent a genuinely value-creative niche private-banking franchise - mid-teens ROE, strong capital, near-zero credit losses, and now a more generous dividend cadence - but at EUR43.0 the market has already paid up for that quality (2.19x book vs a ~1.9-2.1x Gordon-justified range).
HOLD, medium conviction; base target EUR38. Own for the dividend and franchise quality if already held; AUM/IT compounding is the upside case, cost-growth persistence and rate-cycle NII pressure are the risks to watch before adding.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Total income / Net operating profit (FY2025 anchor) | 220 | Five-year Group summary / p.5 📄 p.5 | FY anchor income for the LTM roll; net operating profit EUR 67.2M (+3% YoY), core income (NII+fees+IT) flat at EUR 214.7M. |
| ROE, expense/income, CET1, loan loss, Stage-3 (FY2025 anchor ratios) | 17.8 | Five-year Group summary, Financial ratios / p.6 📄 p.6 | ROE 17.8% (2024: 17.9%), expense/income 0.69, CET1 12.7% (14.5% prior), gross Stage-3 share 1.58% — FY2025 baseline for the thesis. |
| Consolidated income statement (FY2025) | 54.58 | Consolidated income statement / p.161 📄 p.161 | FY2025 net profit attributable to shareholders EUR 54.58M (EUR 54,580K); FY anchor for the LTM attributable roll. |
| Consolidated balance sheet — equity capital breakdown (FY2025) | 386 | Consolidated balance sheet / p.162 📄 p.162 | Total equity capital EUR 386.4M at Dec 31, 2025, of which shareholders' portion EUR 325.4M, NCI EUR 0.015M, AT1 holders EUR 61.0M — confirms the AT1 hybrid split carried into the interim snapshot. |
| Statement of changes in equity capital (FY2025) | 325 | Statement of changes in equity capital / p.163 📄 p.163 | Shareholders' portion of equity capital rolled from EUR 306.5M (Dec 2024) to EUR 325.4M (Dec 2025) after EUR 42.3M dividend and EUR 54.6M profit — cross-checks the balance-sheet equity split. |
| Intangible assets note — goodwill + software (FY2025) | 23.588 | Note G25. Intangible assets / p.220-221 📄 p.220 | Total intangible assets EUR 23.6M (goodwill EUR 2.9M + in-house software EUR 18.7M + other software EUR 2.0M); deducted from equity for tangible equity / ROTE. No impairment; goodwill unchanged YoY. |
| Calculation of own funds / CET1 ratio (FY2025) | 12.7 | Report of the Directors, Capital adequacy Table 2.3.1/2.3.2 / p.179-180 📄 p.179 | CET1 capital ratio 12.7% (14.5% prior year) — comfortable buffer of 3.6pp / EUR 84.5M above the 9.1% combined requirement; the AT1 issuance (EUR 31.6M face, SEK-denominated) sits above CET1 in the stack and is excluded from CET1. |
| Summary income statement — Jan-Jun 2026 / Jan-Jun 2025 (interim) | 23.7 | Summary income statement / p.11 | H1 2026 net profit attributable to shareholders EUR 23.7M (vs EUR 28.5M H1 2025) — subtracted/added quarter for the LTM roll (54.58 − 28.5 + 23.7 = 49.78). Moving-12M EPS disclosed as EUR 3.23, cross-checking to EUR 49.78M / 15.41M shares. |
| Income statement by quarter — Q2 2026 standalone | 9.6 | Income statement by quarter / p.13 | Q2 2026 net profit EUR 9.6M, down 31% YoY (Q2 2025: EUR 13.9M) on a weak associated-company result inside 'other income' (EUR -2.5M) and 5% total-expense growth outpacing flat core income. |
| Summary balance sheet — equity capital (Jun 30, 2026) | 302 | Summary balance sheet / p.14 | Latest-Q balance sheet is the IC/equity base per methodology (not the FY anchor). Shareholders' portion of equity capital EUR 302.5M (Dec 2025: EUR 325.2M) after the EUR 42.4M FY dividend + EUR 19.1M interim dividend accrual; NCI ~EUR 0.0M; AT1 EUR 31.6M (down from EUR 61.0M — half the AT1 stock was called/reclassified during H1). |
| Intangible assets (Jun 30, 2026) | 24 | Summary balance sheet / p.14 | Intangible assets EUR 24M (interim summary precision, 1 decimal) — deducted from equity for tangible equity EUR 278.5M / ROTE 17.9%. Goodwill assumed unchanged at EUR 2.9M (no impairment or M&A disclosed in H1). |
| Credit quality — Stage-3 share and provision ratio (Jun 30, 2026) | 11.51 | Financial ratios, credit quality / p.22 | Provision (coverage) ratio for Stage-3 loans 11.51% (Q1 2026: 11.75%; Jun 2025: 10.61%); gross Stage-3 share fell to 1.41% (Dec 2025: 1.58%) — improving asset quality, net recoveries in H1 2026 (loan loss level -0.01%). |
| Capital adequacy — CET1/Tier1/Total ratio (Jun 30, 2026) | 12.8 | Note 15. Capital adequacy / p.25-26 | CET1 ratio 12.8% (Dec 2025: 12.7%), Tier 1 14.5%, Total capital 16.2% (Dec 2025: 17.6%, down mainly on the AT1 stock roughly halving to EUR 31.6M); no regulatory buffer breach, no escalation trigger. |