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Oma Savings Bank Plc’s Financial Statements Release 1 January – 31 December 2024: The year ended with a fourth quarter in line with expectations – comparable profit before taxes was strong for 2024
OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 10 FEBRUARY 2025 AT 9.15 A.M. EET, FINANCIAL STATEMENTS RELEASE
Oma Savings Bank Plc’s Financial Statements Release 1 January – 31 December 2024: The year ended with a fourth quarter in line with expectations – comparable profit before taxes was strong for 2024
This release is a summary of Oma Savings Bank’s (OmaSp) January-December 2024 Financial Statements Release, which can be read from the pdf file attached to this stock exchange release and on the Company’s web pages www.omasp.fi
CEO Sarianna Liiri: “The year 2024 has been very exceptional in the history of OmaSp. Both main sources of income developed in line with expectations and the year ended with a good quarter. Significant investments in the development of risk management processes and the implementation of an extensive action plan continued. The acquisition of Handelsbanken AB's Finnish SME business and the expansion of the distribution network strengthened OmaSp's market position towards the end of the year and provide a good starting point for the year beginning.
The comparable profit before taxes was EUR 27.9 million for the fourth quarter and the comparable return on equity was 15.6 percent.
As expected, changes in market interest rates were reflected in the development of net interest income, and in the last quarter net interest income fell by 11 percent from the comparison period. The net interest income increased by 8 percent for the whole year. Our customers value our personal and easily accessible service model. This is reflected in the development of the number of customers, which remained despite an exceptional year at a good level. With Handelsbanken's business acquisition, OmaSp gained approximately 10,000 new customers in the autumn, and in addition to this, approximately 1,000 new customer relationships were organically created every month. In particular, fee and commission income and expenses net were increased by card and payment fees, which increased by 16 percent from the previous year. Fee and commission income and expenses net increased by 8 percent in the last quarter and by 7 percent for the full year. At the end of the year, the business focus has been especially on the reception of customers who have transferred from Handelsbanken and the start of operations in three new branches. With the expanded distribution network OmaSp now has excellent coverage in all of Finland's key growth and provincial centers.
OmaSp's loan portfolio and deposit base were boosted by volumes transferred from Handelsbanken. The portfolio of housing loans grew by 5 percent, corporate loan portfolio by 8 percent and deposits by 6 percent from a year ago.
Accumulation of impairment losses on financial assets was significantly affected by non-compliance with the guidelines and related additional allowances. In 2024, credit losses amounted to approximately EUR 84 million, of which approximately EUR 64 million were related to non-compliance with the guidelines. In the last quarter, the credit loss level remained at last year's level.
The Company has continued to make significant investments in risk management and the implementation of the action plan launched in the summer. As a result, the cost level remained high in the last quarter of the year. An additional EUR 5.4 million was invested in risk management processes in October–December and comparable costs increased by 44 percent during the fourth quarter. Expenses were also increased by the increased number of personnel. During the financial year, the Financial Supervisory Authority (FIN-FSA) carried out audits of the Company. Based on the audits, the observations raised by the supervisor and the development targets already identified by the Company itself support each other. The measures to develop the processes are proceeding well on schedule and the goal is to complete the development measures planned during 2024 in the first half of 2025.
The comparable cost/income ratio remains at a good level despite significant investments and was 47.7 percent in the last quarter.
Customer and personnel satisfaction at the center of everything OmaSp's competitive advantage has been and will continue to be built on excellent customer experience. According to research, customer and personnel satisfaction have remained at an excellent level as in previous years, despite the exceptional year. Our personnel are our most essential resource, so committed and motivated personnel play a vitally important role for OmaSp's future success. The renewed board of the Company started its work in December, and we have got five experienced board experts to strengthen the bank's operations. In addition, the Company's new CEO, Karri Alameri, will start his work in April at the latest.
OmaSp's financial position is stable, and the Company's solvency and liquidity position is at a good level. The total capital (TC) ratio was 15.6 percent at the end of the year and the accumulation of equity is nearly EUR 580 million.
After the changes implemented in 2024, we will now be able to focus on our core business and strengthen the customer experience of our existing and new customers. OmaSp's ambition is to enable and solve the needs of households and small and medium-sized enterprises in all areas of the bank's operations. In February, the history of OmaSp stretches back 150 years. From these strong starting points, we will continue in 2025 with confidence.
Warm thanks to all customers and owners, and especially to OmaSp's personnel for 2024!”
January-December 2024 • Oma Savings Bank Plc’s Extraordinary General Meeting was held on 10 December 2024. The Extraordinary General Meeting confirmed on the remuneration, number and composition of the members of the Board of Directors. The number of members of the Board of Directors was confirmed to be eight, i.e. the number of members increased by one. Aki Jaskari, Jaakko Ossa and Jaana Sandström were re-elected as Board members and Juhana Brotherus, Irma Gillberg-Hjelt, Carl Pettersson, Kati Riikonen and Juha Volotinen were elected as new members. • The Company’s Board of Directors appointed Karri Alameri, B.Sc. (Econ.), CEFA as the Company’s new CEO on 30 September 2024. Alameri will start his position no later than 1 April 2025. • On 1 September 2024, the Company completed the acquisition of Svenska Handelsbanken AB’s SME business in Finland as planned. The deposit portfolio transferred to the Company was approximately EUR 440 million and the loan portfolio approximately EUR 500 million. A goodwill of EUR 15.3 million was recognised from the acquisition. Approximately 10,000 customers transferred to the Company in the acquisition, and at the same time 30 people transferred to the Company as old employees. • During the second quarter, the Company launched an extensive risk management action plan (the "Noste"), which has been implemented according to plan. • In January–December, net interest income grew 8.1% compared with the same period last year. Net interest income totalled EUR 213.1 (197.0) million. In the last quarter, net interest income decreased by 10.5% compared to the comparison period. • Home mortgage portfolio increased by 5.0% during the previous 12 months. Corporate loan portfolio increased by 8.0% during the previous 12 months. • Deposit base increased by 5.5% over the past 12 months. • In January-December, fee and commission income and expenses (net) increased due to volume growth by 7.0%. In the last quarter, fee and commission income and expenses (net) increased by 7.5% compared to the comparison period. • In January–December, total operating income grew by 9.3% compared to the comparison period. In the last quarter, comparable total operating income remained at the same level compared to the last quarter and was EUR 68.2 (69.4) million. • In January-December, total operating expenses grew in total by 22.6%. The growth is mainly explained by expenses arising from business arrangements as well as from extensive risk management development projects and investigation costs related to non-compliance with the guidelines. In addition, the number of personnel increased during the year due to the business arrangements, the opening of new branches and the strengthening of risk management processes. Other operating expenses were in total EUR 69.3 (52.5) million, of which the development costs of the risk management action plan and investigation costs related to non-compliance with the guidelines amounted to EUR 11.8 million. • Comparable total operating expenses grew by 44.0% in the last quarter and were EUR 32.4 (22.5) million. Of this the risk management action plan (the ”Noste”) amounted to EUR 5.4 million. • For January-December, the impairment losses on financial assets were in total EUR -83.4 (-17.1) million. A total of EUR 64.4 million in impairment losses on financial assets were recorded in relation to non-compliance with the guidelines, of which EUR 4.9 million was final impairment losses on financial assets. Impairment losses on financial assets amounted to EUR 7.6 (7.3) million in the last quarter. • For January-December, profit before taxes was EUR 74.6 (138.0) million. For the last quarter, profit before taxes was EUR 22.6 (35.5) million. • In January-December, comparable profit before taxes was EUR 86.7 (143.6) million. For the last quarter, comparable profit before taxes was EUR 27.9 (38.8) million. • In January-December, cost/income ratio was 41.3 (36.9)%. In the last quarter, cost/income ratio was 52.9 (35.4)%. In January-December, comparable cost/income ratio was 37.8 (35.1)%. In the last quarter, comparable cost/income ratio was 47.7 (32.8)%. • In January-December, comparable return on equity (ROE) was 12.4 (25.3)%. For the last quarter, comparable return on equity (ROE) was 15.6 (23.5)%. • Total capital (TC) ratio was 15.6 (16.5)%.
The Group's key figures (1,000 euros)
1–12/2024
1–12/2023
Δ%
2024 Q4
2023 Q4
Δ%
Net interest income
213,097
197,045
8%
50,913
56,907
-11%
Fee and commission income and expenses, net
50,745
47,421
7%
13,105
12,188
8%
Total operating income
270,068
247,067
9%
64,381
67,190
-4%
Total operating expenses
-111,004
-90,550
23%
-33,917
-23,483
44%
Impairment losses on financial assets, net
-83,379
-17,126
387%
-7,572
-7,269
4%
Profit before taxes
74,589
138,048
-46%
22,582
35,546
-36%
Cost/income ratio, %
41.3%
36.9%
12%
52.9%
35.4%
49%
Balance sheet total
7,709,090
7,642,906
1%
7,709,090
7,642,906
1%
Equity
576,143
541,052
6%
576,143
541,052
6%
Return on assets (ROA) %
0.8%
1.6%
-52%
0.9%
1.5%
-40%
Return on equity (ROE) %
10.7%
24.3%
-56%
12.6%
21.5%
-41%
Earnings per share (EPS), EUR
1.80
3.49
-48%
0.54
0.85
-36%
Total capital (TC) ratio %
15.6%
16.5%
-6%
15.6%
16.5%
-6%
Common Equity Tier 1 (CET1) capital ratio %
14.4%
14.9%
-3%
14.4%
14.9%
-3%
Comparable profit before taxes
86,656
143,609
-40%
27,945
38,790
-28%
Comparable cost/income ratio, %
37.8%
35.1%
8%
47.7%
32.8%
45%
Comparable return on equity (ROE) %
12.4%
25.3%
-51%
15.6%
23.5%
-34%
Outlook for the financial year 2025: The Company's business outlook for the financial year 2025 will be affected by lower market interest rates and the continued high cost level due to IT investments and system improvements required by risk management and quality processes. In addition, the Company continues to invest in customer experience on different channels. The uncertainty of the operating environment and economic situation affects the development of balance sheet items and comparable profit for the financial year 2025.
Oma Savings Bank Plc provides earnings guidance on comparable profit before taxes for 2025. 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.
We estimate the Group's comparable profit before taxes to be EUR 65-80 million for the financial year 2025 (comparable profit before taxes was EUR 86.7 million in the financial year 2024).
Board of Directors’ proposal for the distribution of profit to AGM The Board of Directors proposes to the Annual General Meeting a dividend in accordance with the dividend policy, at least 20% of the Company's net profit. The proposal for the distribution of profit aims to increase capital buffers and maintain strong liquidity. The Board of Directors proposes that, on the basis of the Financial Statements to be adopted for 2024, a dividend of EUR 0.36 be paid from the Parent Company's distributable profits for each share entitled to a dividend for 2024.
The proposed record date for dividends would be 10 April 2025 and the payment date 17 April 2025.
No material changes have taken place in the Company's financial position after the financial year. The Company’s liquidity is good, and the proposed profit distribution does not compromise the Company’s liquidity according to the Board of Directors’ insight.
General Meeting The Annual General Meeting is scheduled to be held on 8 April 2024. The Company's Board of Directors will convene the Annual General Meeting separately at a later date.
DISTRIBUTION Nasdaq Helsinki Ltd Major media www.omasp.fi
OmaSp is a solvent and profitable Finnish bank. About 500 professionals provide nationwide services through OmaSp’s 48 branch offices and digital service channels to over 200,000 private and corporate 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.
