OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 7 FEBRUARY 2023 AT 8.30 A.M. EET, FINANCIAL STATEMENTS RELEASE
Oma Savings Bank Plc’s Financial Statements Release 1 January – 31 December 2021: Record year on all key figures
This release is a summary of Oma Savings Bank’s (OmaSp) January-December 2023 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 Pasi Sydänlammi: Record year on all key figures
“Overall, 2023 was a year of strong growth for OmaSp and all key figures rose to new record levels. The profitable growth that has continued from year to year is reflected in the accumulation of equity, which enables future investments and an even greater distribution of profit to owners.
Continued earnings and business performance throughout the early year continued also in the fourth quarter of the year. In addition, the acquisition of Eurajoen Savings Bank’s business was completed in December, which will have a positive profit impact of approximately EUR 14 million in total. Of this, EUR 7.5 million was recorded for the financial year 2023. Comparable profit before taxes for the last quarter increased by almost 110% compared to the comparison period and was EUR 14.5 million. Comparable return on equity was at a good level of 12%.
The year 2023 as a whole was excellent and we broke all previous earnings records. Demand for home mortgage loans and corporate loans was strong, and the quality of the loan portfolio improved further. Home mortgage loan portfolio grew by almost 30% compared to the previous year, and the growth rate was about seven times the market. Excluding the acquisition of Eurajoen Savings Bank’s business, the growth of home mortgage loan portfolio was 20%. Both main sources of income developed strongly throughout the year; Net interest income increased by 18% and Fee and commission income and expenses by 15%. Comparable cost/income ratio reached an excellent level of 48%. Compensation received from the core banking project, approximately EUR 22 million, was recorded as a significant one-off item for the financial year.
Balance sheet grew by almost one billion during the financial year, exceeding EUR 5 billion for the first time, reaching EUR 5.4 billion. For January-December, profit before taxes increased by a whopping 121% to EUR 83.3 million. Comparable profit before taxes also doubled to EUR 53.1 million.
Increasing dividend for the sixth year in a row
The ever-strengthening profitability enables a growing dividend to owners. Dividend proposal to Annual General Meeting is record high, totalling EUR 0.50 per share. In accordance with the Board’s profit distribution proposal, an actual dividend of EUR 0.30 per share is proposed based on the result of continuing operations for the last financial year, and an additional dividend of EUR 0.20 per share is proposed due to significant one-off items last year.
In the coming years, the company’s use of capital will become even more efficient with IRB methods. OmaSp has been preparing the application of the IRB method in capital adequacy calculations for a long time, and we submitted an application for a permit to the Finnish Financial Supervisory Authority in early February. It is also important to us that the application of the IRB method improves risk management and raises OmaSp to a comparable position with benchmark banks.
Excellent customer and personnel experience as the basis for profitable growth
Our operations are based on excellent personnel and customer experience, and both components are at record highs as studied. OmaSp has been one of the most profitable and efficient banks in the Nordic countries in recent years, and we want to cherish it in the future as well. We are following with great interest the ongoing changes and possible restructuring in the financial sector. In line with our earnings guidance, we expect OmaSp’s profitable growth to remain strong in 2023.
Warm thanks to customers, personnel, owners and partners for 2023!”
January-December 2021
• Net interest income continued to increase strongly by 15,8% in October-December and by 18,2% throughout the year.
• Home mortgage portfolio increased by a total of 29.8% over the previous 12 months. At the same time, corporate loan portfolio increased by 27.4%.
• Deposit stocks grew by 21.9% over the previous 12 months.
• Fee and commission income and expenses (net) item increased in October-December by 9,1% and by 15,1% for the whole year.
• In accordance with the plan, the company completed the acquisition of Eurajoen Savings Bank’s business in December. The acquisition increased the company’s balance sheet by approximately EUR 335 million and increased the number of private and corporate customers by approximately 12,000. The positive profit impact of the acquisition on the company is estimated to be approximately EUR 14 million, of which EUR 7.5 million has been recognised in the company’s profit before taxes for the financial year 2023. Costs related to the acquisition of the business were approximately EUR 4.4 million. Costs have mainly been recorded in the last quarter of 2023.
• In June, the company announced that it had agreed with Cognizant to terminate the contract for the core banking project. As part of the agreement Cognizant paid the company a financial compensation, which had a positive impact of approximately EUR 22 million on the company’s profit before taxes. Compensation was recorded in the second quarter.
• Total operating income grew by 26,9% during the last quarter and came to a total of EUR 39,5 million. During the financial year the total operating income grew by 41,0% to EUR 156,6 (111,1) million.
• Impairment losses on financial assets decreased significantly compared to the comparison period and were EUR 1,6 (7,6) million in October-December. For the whole of the year, impairment losses on financial assets decreased compared to the previous year and amounted to EUR 7,3 (21,6) million.
• Cost/income ratio for the last quarter increased and was 49,9 (41,3)%. The comparable cost/income ratio increased slightly and was 47,9 (46,5)%.
• Cost/income ratio for the whole financial year improved and was 41,9 (46,6)%. Also the comparable cost/income ratio improved and was 48,0 (51,2)%.
• For October-December, profit before taxes increased significantly compared to the previous financial year and was EUR 18,0 (10,5) million. Also for the whole financial year, profit before taxes increased significantly compared to the previous financial year and was EUR 83,3 (37,7) million.
• For October-December, comparable profit before taxes increased significantly compared with the comparative period and was EUR 14,4 (6,9) million. For the whole of the year, comparable profit before taxes was EUR 53,1 (26,7) million.
| The Group’s key figures (1,000 euros) | 1-12/2021 | 1-12/2020 | Δ% | 2021 Q4 | 2020 Q4 | Δ% |
| Net interest income | 80,130 | 67,819 | 18% | 21,873 | 18,890 | 16% |
| Fee and commission income and expenses, net | 33,686 | 29,257 | 15% | 9,094 | 8,332 | 9% |
| Total operating expenses | -65,294 | -51,676 | 26% | -19,518 | -12,758 | 53% |
| Impairment losses on financial assets, net | -7,294 | -21,587 | -66% | -1,632 | -7,602 | -79% |
| Profit before taxes | 83,271 | 37,707 | 121% | 17,967 | 10,541 | 70% |
| Cost/income ratio, % | 41.9% | 46.6% | -10% | 49.9% | 41.3% | 21% |
| Balance sheet total | 5,372,633 | 4,381,999 | 23% | 5,372,633 | 4,381,999 | 23% |
| Equity | 401,294 | 353,493 | 14% | 401,294 | 353,493 | 14% |
| Return on assets (ROA) % | 1.4% | 0.8% | 70% | 1.1% | 0.9% | 23% |
| Return on equity (ROE) % | 17.6% | 9.1% | 93% | 14.5% | 10.4% | 39% |
| Earnings per share (EPS), EUR | 2.22 | 1.04 | 113% | 0.48 | 0.31 | 55% |
| Common Equity Tier 1 (CET1) capital ratio % | 15.5% | 15.9% | -2% | 15.5% | 15.9% | -2% |
| Comparable profit before taxes | 53,142 | 26,729 | 99% | 14,448 | 6,910 | 109% |
| Comparable cost/income ratio, % | 48.0% | 51.2% | -6% | 47.9% | 46.5% | 3% |
| Comparable return on equity (ROE) % | 11.2% | 6.5% | 72% | 11.6% | 7.0% | 66% |
Outlook for the financial year 2023:
The company estimates that profitable growth will continue to be strong. The Group’s 2023 comparable profit before taxes will increase compared to the previous financial year.
Board of Directors’ proposal for the distribution of profit to AGM
The Board of Directors proposes that, based on the financial statements to be approved for 2023, a dividend of EUR 0.30 to be paid from the parent company’s distributable profits for each share entitling the shareholder to dividend for 2023. In addition, the Board of Directors proposes to pay an additional dividend due to the strong earnings and significant one-off items for the financial year 2023. An additional dividend of EUR 0.20 is proposed for each share entitling to a dividend for 2023. For 2023, a total dividend of EUR 0.50 per share would be paid for the financial year 2023.
General Meeting
The Annual General Meeting is scheduled to be held on Wednesday 30 March 2023. The company’s Board of Directors will convene the Annual General Meeting separately at a later date.
Oma Savings Bank Plc
Additional information:
Pasi Sydänlammi, CEO, puh +358 45 657 5506, [email protected]
Sarianna Liiri, CFO, puh. +358 40 835 6712, [email protected]
Minna Sillanpää, CCO, tel. +358 50 66592, [email protected]
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.omasp.fi
OmaSp is a growing Finnish bank and the largest savings bank in Finland based on total assets. About 330 professionals provide nationwide services through OmaSp’s 35 branch offices and digital service channels to over 150,000 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.
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