A memorable year 2020
Rapid growth of the business continued and the profit rose to a new record level.
The positive development of the business continued to be excellent throughout the year, and new customer relationships were created at their best in well over a thousand a month. We monitored closely the development of corona pandemic and made the necessary changes to our operating models. Despite exceptional times, we have been able to guarantee customers safe banking in their chosen service channel.
Both main sources of income, net interest income and fee and commission income, continued strong growth. During 2020, operating income increased by as much as 20% and at the same time expenses remained under control. In terms of the cost/income ratio, which describes the efficiency of banking operations, we achieved an excellent level of 46.6%. For the first time, the balance sheet total exceeded the EUR 4 billion threshold, ending at EUR 4.4 billion. The balance sheet grew by a record EUR 965 million during the financial year. The profit before taxes for January-December increased by 15% to EUR 37.7 million.
The quality of the loan portfolio has remained at a good level. We have also been prepared for the possible effects of the corona pandemic and increased the loss allowance based on management's judgement in the fourth quarter to EUR 4.4 million. The allowance is fully available.
We support our customers success
During the year, we issued two EUR 250 million bonds and a EUR 55 million senior and unsecured bond, with which we ensured our ability to meet the increased demand of our customers.
We signed an extension on a guarantee agreement with the European Investment Fund (EIF) worth EUR 75 million. With the co-operation programme we can ease Finnish SMEs’ access to credit and encourage investing. New financing can be offered for investments made in the initial stages of an SME and for boosting current operations and implementing new projects. Moreover, we started up national collaboration with the Finnish Enterprise Agencies. Through the collaboration, we give our support to Finnish entrepreneurs.
We responded to customers' wishes with new launches and we introduced new payment services for our customers during the autumn. Among other things, we responded to the needs of entrepreneurs by launching a diversified corporate card that will contribute to growth in the corporate business.
Our bank's competitiveness is based on excellent customer experience and the skills of our personnel. According to the results of the annual personnel survey, the overall satisfaction of our personnel has reached a record high level. The customer survey results highlighted first-class service experience and high levels of satisfaction with their own contact person, among other things.
Positive outlook for 2021
We will be able to start the new financial year again from an excellent starting point. Merger negotiations with Eurajoen and Mietoinen Savings Banks, which started at the end of the year, are progressing as planned. The changing operating environment in the financial sector and evolving technology offer our bank many interesting opportunities.
Our strategy relies on profitable growth, a straightforward business model and effective risk management. In these extraordinary times, the social importance of the bank is underlined and a strong financial position ensures our ability to be there for our customers. Flexible operating models allow us to develop our business and make strong performance even in a changing operating environment.
Warm thanks to customers, personnel, owners and partners for 2020!