Oma Savings Bank Plc: Year 2018 comparable profit EUR 26.2 million - significant growth 34%



Oma Savings Bank Plc: Year 2018 comparable profit EUR 26.2 million - significant growth 34%

This release is a summary of Oma Savings Bank’s (OmaSp) 31 December 2018 Financial Statements release, which can be read from the pdf file attached to this stock exchange release and on the company’s web pages

CEO Pasi Sydänlammi:

Profitable growth continues 

The growth in business volumes continued to be brisk in Q4. Net interest income grew 27%, totalling EUR 13.4 (10.6) million. The strong development of net interest income was impacted in particular by the growth in the loan portfolio and decrease in refinancing costs. Fee and commission income continued its strong development, totalling EUR 7.4 (6.2) million. We strength¬ened our operations in Finland’s main growth centres in Greater Helsinki, Oulu and Turku. As expected, this caused an increase in personnel, rental and business premise expenses. We developed our digital service channels and introduced our own innovative OmaKonttori app. One of Q4’s most significant events was the preparations for the IPO and its suc¬cessful implementation in challenging market conditions. The Group's Q4 profit before taxes was EUR 6.6 (2.6) million. 

Our operations continued to be strong and stable for the entire year. The balance sheet reached a new record of more than EUR 2.91 (2.73) billion. The comparable profit before taxes exclud¬ing net income from financial assets and liabilities was EUR 26.2 (19.6) million, which is 34% growth compared to the previous year. Our key sources of income, net interest income and commission income, showed excellent de¬velopment. During the 2017 accounting period, the net income from financial assets and liabilities was highlight¬ed in the profit, the impact on the profit being EUR 10.8 million. 

Loan stocks are growing multiple compared to market 

The pace of mortgage lending remained good through¬out the year. Our housing loan portfolio grew by 15%, the rate being eight times the market. The most significant growth occurred in the corporate loan portfolio, which grew by 32.9% during the year. The growth of our corpo¬rate loan portfolio is fourfold compared to the market. 

Growth was enabled by satisfied customers and a high level of employee satisfaction. During the year, the pace of customer acquisition picked up and improved and the bank's growth was largely organic. The growth in business volumes was affected by the optimisation of the office network and partly by the acquisition of S-Pankki’s SME and agriculture & forestry operations. 

Diverse funding operations 

Our funding operations have become more diversified as a result of the extension of the licence to act as a mortgage credit bank issued by the Finnish Financial Supervisory Authority and the launch of the operations. In June 2018, we issued a EUR 100 million covered bond as part of our EUR 1.5 billion bond programme. This has afforded us a better and more competitive foundation from which to serve our customers’ needs, while reducing refinancing costs. 

New agreements to support companies’ competitiveness 

We signed three agreements with the European Invest¬ment Bank in 2018. In addition to the loan agreement signed in the spring, we were the first Finnish bank to sign with the European Investment Bank two guarantee agreements under its programme for Employment and Social Innovation (EaSI), through which we will be able to provide EUR 40 million in loans to 2,600 micro-entrepre¬neurs and EUR 10 million in loans to 100 social enter¬prises in Finland. At year-end, we signed an agreement with the Nordic Investment Bank for a EUR 35 million loan programme for financing SMEs, small midcaps and environmental projects. Working together supports our competitiveness and provide us with opportunities to finance our business customers under favourable terms. Entrepreneurs and companies make up a significant share of our growing customer base.

Investments in service availability 

Both our private and business customers are happy with the bank’s extended operations. The opening of two new branch offices in Lahti and Jyväskylä in 2017 was successful. 

We have been successful in meeting the challenges presented by a changing operating environment. The service hours for branch offices and customer service have been adjusted to correspond with customers’ expectations. Our branch offices in growth centres also serve customers on weekday evenings and some also on Saturdays. Customer meetings are also arranged outside our regular office hours and, increasingly, at the custom¬er’s preferred location and time. 

During 2018, we invested in our digital services. We launched the OmaVahvistus personal identification number application, which provides strong electronic authentication and replaces transaction authentication number lists and mobile certificates. Furthermore, we introduced the OmaKonttori app, our own innovation, which brings our banking agents and face-to-face meet¬ings to the customer’s smart phone. The OmaKonttori app can be used for bank negotiations and, combined with the OmaAllekirjoitus app, for signing and approving agreements digitally. We wish to offer our customers a personal banking experience even when they prefer to do their banking through digital channels. 

Listing on the official list of the Helsinki Stock Exchange 

One of the year’s most significant events was the prepa¬rations for the IPO and its successful implementation in challenging market conditions. In August 2018, our Board of Directors decided to initiate a strategic review con¬cerning the listing of the company on the stock exchange and, in addition, the planning of the IPO and listing on Nasdaq Helsinki Ltd. 

We celebrated the memorable and historic event on the final day of November by ringing the Helsinki Stock Exchange’s opening bell. The bank received EUR 31.3 million in IPO gross proceeds. The impact of listing costs on the financial statements is approximately EUR 1.8 million. The bank now has more than 1,700 shareholders and more than 60% of the personnel are also owners. The listing is a significant step and will improve our operation¬al capabilities in the future. 

High level of personnel satisfaction reflects positively on customers 

The competence of our personnel is a key competitive factor and we continuously work to improve it. One example of this is the OmaSp Master training programme that we created together with the University of Tampere, which was completed in spring 2018 with the first super¬visors and experts. 

Our personnel is highly motivated and have an en¬trepreneurial spirit. Local agreements have been in use for years and they have made it possible for us to offer Saturday opening hours. Our personnel’s satisfaction with the bank overall was 4.3/5 in the personnel survey of 12/2018. The personnel’s work satisfaction and well-be¬ing reflects positively on our customers. Customers’ satisfaction with the bank as a whole was 4.3/5 and satis¬faction with their contact person was 4.7/5 in the Parasta Palvelua 12/2018 survey. 

We believe that excellent customer experience will continue to boost the company’s profitable growth in the future. Our solvent bank has been one of Finland’s more profitable and efficient banks in recent years, which is something we wish to cultivate in the future by focussing on efficient operations and positive customer experience.

October–December 2018 

- Net interest income was EUR 13.4 (10.6) million, an increase of 27%. 

- Commission income was EUR 7.4 (6.2) million and the total amount of fee and commission expenses was EUR 2.6 (1.0) million. The growth in fee and commis¬sion expenses is the result of the one-time expenses linked to the bank’s listing on the stock exchange. 

- Operating income came to approximately EUR 18.2 (24.1) million. 

- Total operating expenses were EUR 13.4 (11.9) million. Operating expenses rose due to personnel expenses, expenses resulting from the opening of new branch offices and the expenses from the IPO. 

- The total amount of impairment losses on financial assets was EUR 0.2 (1.8) million. The difference to the comparable period results from the change in the impairment assessment process in connection with the implementation of the IFRS 9 Financial Instruments standard. 

- The Group’s profit before taxes was EUR 4.5 (10.5) mil¬lion. The bank’s comparable profit before taxes, which has been adjusted for net interest income on financial assets and liabilities and IPO expenses, was EUR 6.6 (2.6) million. 

- Oma Savings Bank was listed on the official list of Nasdaq Helsinki Ltd. and raised EUR 31.3 million in proceeds in the IPO. Trading in the shares began on the Prelist 30 November 2018 and on the official list 4 December 2018. 

- Oma Savings Bank released its first Q3 interim report complying with the IAS 34 standard on 5 November 2018. 

January–December 2018 

- The Group’s profit before taxes for the accounting period was EUR 25.0 (30.4) million. 

- The bank’s comparable profit before taxes for the accounting period was EUR 26.2 (19.6) million. The comparable profit has been adjusted for EUR 0.6 million in net income on financial assets and liabilities and EUR 1.8 million in expenses linked to the IPO. EUR 10.8 million in net income from financial assets and liabilities was highlighted in the result for the 2017 accounting period. 

- Operating income was EUR 76.0 (74.1) million, an increase of 2.5% year-on-year. 

- Net interest income grew 25.5% and was EUR 49.4 (39.3) in total. 

- Fee and commission income came to a total of EUR 29.7 (24.8) million. 

- The net income on financial assets and liabilities was EUR 0.6 (10.8) million. The difference to the compa¬rable period 2017 results from capital gains from the sale of shares. 

- Operating expenses grew 14.9% to EUR 47.2 (41.1) in total. This growth was largely the result of increases in personnel expenses and other expenses. 

- Impairment losses on financial assets were EUR 3.7 (2.6) million. 

- The Group’s balance sheet total grew by 6.9% to EUR 2,914.7 (2,726.6) million. 

- Group equity grew by 20.2% to EUR 290.3 (241.5) million. The profit for the accounting period accounted for EUR 20.3 million of the increase in equity capital. 

- The Group’s solvency ratio (TC) remained strong and was 19.3% (18.9%) at the end of the period. The core capital’s (CET1) ratio to risk-weighted items was 18.4% (17.6%). 

* IFRS 9 Financial Instruments standard implementation 1 January 2018. The comparable figures have not been adjusted. ** The number of shares in the comparable periods take into account the 50:1 stock split carried out on 9 November 2018.*** Solvency calculation begun at the Group level on 31 March 2018. 1) Calculated at the parent company level. 2) The key figure does not correspond to the figure presented in the published interim report or financial statements. 3) The calculation principles of the key figures and alternative key figures are presented in note G16 of the financial statements. The items related to the comparability of key figures and the actual calculation are presented on pages 18-19.

Outlook for the 2019 accounting period:

The company’s business volumes are predicted to maintain their strong growth during the 2019 accounting period. The company’s profitable growth is supported by efforts in recent years to improve the customer experi­ence and the availability of customer service through new digital service channels and the opening of new units.

Oma Savings Bank Plc provides earnings guidance and the comparable profit before taxes and the profit before taxes. A verbal description is used to make a comparison with the comparable period.

Earnings guidance is based on the forecast for the entire year, which takes into account the current market and business situation. Forecasts are based on the manage­ment’s insight into the Group’s business development.

Guidance for the 2019 accounting period:

Provided that profitable growth continues, the company estimates that the Group’s comparable profit before taxes for 2019 will grow compared to the previous accounting period. At the same time, the profit before taxes for 2019 is estimated to grow compared to the previous accounting period.

Board of Directors’ proposal for the distribution of profit:

The Board of Directors proposes that, based on the financial statements to be approved for 2018, a dividend of EUR 0.14 be paid from the parent company’s distrib­utable profits for each share entitling the shareholder to dividend for 2018. All of shares outstanding on the dividend record date, with the exception of the own shares held by the parent company, are entitled to a dividend for 2018.

No significant changes took place in the bank’s finan­cial position after the end of the accounting period. The bank’s liquidity is good and the proposed distribution of profit does not compromise the bank’s liquidity accord­ing to the Board of Directors’ insight.

General Meeting

Oma Savings Bank Plc’s Annual General Meeting will be held on Monday 29 April 2019 at 12:00 pm.


Board of Directors

Additional information:

Pasi Sydänlammi, CEO, tel. +358 45 657 5506,

Sarianna Liiri, Chief Financial and Administrative Officer, tel. +358 40 835 6712,

Additional information and interview requests for media:

Minna Sillanpää, CCO, tel. +358 50 66592,


Nasdaq Helsinki Ltd

Major media

Oma Savings Bank in short

OmaSp is a growing Finnish bank and the largest savings bank in Finland based on total assets. Over 270 professionals provide nationwide services through OmaSp’s 40 branch offices and digital service channels to approximately 135,000 customers. OmaSp focuses primarily on retail banking operations and provides its clients with a broad range of banking services both through its own balance sheet as well as by acting as an intermediary for its partners’ products. The intermediated products include credit, investment and loan insurance products. OmaSp is also engaged in mortgage banking operations.

OmaSp core idea is to provide personal service and to be local and close to its customers, both in digital and traditional channels. OmaSp strives to offer premium level customer experience through personal service and easy accessibility. In addition, the development of the operations and services is customer-oriented. The personnel is committed and OmaSp seeks to support their career development with versatile tasks and continuous development. A substantial part of the personnel also own shares in OmaSp.

Read Financial statements release