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Q2 earnings up at Finland’s eQ bank, assets under management grow 26%

Finnish wholesale bank eQ has posted second quarter earnings sharply higher at E4.3 million, up from E0.3 million in the same period a year earlier, largely thanks to a booming corporate finance business.

Away from investment banking however, the Finnish player said that turbulence in the equity market had more impact on its operations, and forecast that this would continue into the second half of the year.

In the asset management field, eQ said the long positive development of the stock markets ended in May and June, volatility increased and the share prices declined. The market uncertainty had also an effect on eQ’s assets under management and performance fees.

Despite this, eQ’s assets under management (including deposits) grew 26% compared to the previous year, totaling E837 million on June 30, 2006. The business unit’s net revenues increased to E7.4 million from E6.2 million a year before, and the operating profit was E2.8 million (E1.9 million).

Revenues and the profitability for the second quarter declined compared with the first quarter of this year mainly due to clearly lower incentive fees. During the period, eQ offered four capital-guaranteed index-linked bonds to its customers. One issue especially, an emerging markets bond linked to the development of certain emerging stock markets, received positive interest from eQ’s customers, the bank said.