Fundamentals of Financial Markets Lecture 10 - 2025

**Fundamentals of Financial Markets** **06.02.2025 -- Lecture 10** Banks are not normal businesses; they play a crucial role in society -\> therefore they are highly regulated. - Since the GFC the banking sector has been struggling. - Increased regulation. - Increased competition....

**Fundamentals of Financial Markets** **06.02.2025 -- Lecture 10** Banks are not normal businesses; they play a crucial role in society -\> therefore they are highly regulated. - Since the GFC the banking sector has been struggling. - Increased regulation. - Increased competition. - Longtail of GFC and Eurocrisis A screen shot of a graph AI-generated content may be incorrect. - Since COVID, European banks have been struggling.  - Since interest rates have been increasing so has the profitability of banks. - However, these earnings are not seen as sustainable. [Case: Aktia] A graph of income mix AI-generated content may be incorrect. Key facts: - Aktia manages more assets compared to other traditional Finnish banks. - But asset management has been poor. - Aktia has remained a mediocre investment. - Aktias profitability has been moderate, and growth has been sluggish. - Conservative with lending - Aktia has a strong capital position. - High and improving CET1 ratio. How to get potential from Aktias - Once interest rates are lowered, ROE will be mediocre again. - Needs to grow more rapidly to improve profitability. - Better asset management to improve net cash inflows. - Better operation, improve bank peer ROE%. - New strategy, management, join M&A.