Business development continued to be strong in a demanding operating environment Helsinki Stock Exchange:OMASP


Oma Savings Bank Plc’s Half-Year Financial Report 1.1.-30.6.2020: Business development continued to be strong in a demanding operating environment

This release is a summary of Oma Savings Bank’s (OmaS) January-June 2020 Half-Year Financial Report, which can be read from the pdf file attached to this stock exchange release. In addition, alongside with the Half-Year Financial Report, the Company also publishes Disclosure information on capital adequacy and risk management in accordance with the Pillar III as a separate report, available as an attached pdf file. Both reports are also available on the Company’s website at

CEO Pasi Sydänlammi:
”We can be pleased with the development of the business in the early part of the year. Our net interest income grew by close to 14% and operating income grew in total by nearly 11%. Positive developments in our main sources of income, namely net interest income and operating income, have continued at expected levels despite the demanding operating environment.

Corona pandemic and the foreclosures it induces have had a broad impact on the everyday life of people and businesses during the second quarter of the year. We have invested in ensuring safe banking and encouraged our customers to take advantage of digital service channels. Our personnel has adapted to changing situations excellently and has shown exemplary activity throughout the early part of the year.

The profit before taxes for April–June was EUR 6.5 million. Our comparable profit before taxes developed well, closing at EUR 7.3 million, an increase of 2%.

During Q2, we sold the majority of our real estate holdings to reduce our continuous maintenance costs and administrative burden. As a result of the transaction, we recognised EUR 2.3 million in sales losses. At the same time, we signed long-term lease agreements for the business premises remaining in our own use.

Despite the uncertainty in the operating environment, the quality of the loan portfolio has remained strong. We recognised EUR 6.6 million in credit losses in the second quarter. We prepared pre-emptively for the impacts of the corona pandemic with group-specific additional loss allowance based on management judgement. The allowance is still available in full.

The profit before taxes for January–June was EUR 13.7 million and our comparable profit was EUR 9.0 million. During the first half of the year, our balance sheet grew by more than 12%, coming to approximately EUR 3.8 billion, a record high.

Boosting Finland’s economic growth through financing for SMEs
We signed a new 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.

New products meet customers’ wishes
We continuously develop our digital services. We will introduce during the autumn new payment services for our customers. Among other things, the needs of entrepreneurs will be met by the launch of a diversified corporate card that will contribute to growth in the corporate business.

Profitable growth priority
The Board of Directors of the bank decided in its June meeting to update its long-term strategic Common Equity Tier 1 (CET1) capital ratio target to 14% as of 1 October 2020. The revised target level will significantly enhance the use of capital over the medium term. Our financial targets of annual growth in total operating income, profitability and the targeted return on equity remained unchanged.

Our strong financial position and ability to react quickly in a changing market situation makes it possible to continue the bank’s profitable growth also in the future, no matter what the economic situation. We expect earnings growth in both key sources of income, net interest income and fee and commission income, for the 2020 accounting period. At the same time, operating costs are estimated to remain approximately at current level.

The company’s core business is expected to improve further in the 2020 accounting period.”

January – June 2020
• Net interest income increased 10.0% in April-June and 13.6% in January-June compared to the same period last year.
• The home mortgage portfolio has increased by a total of 3.5% during the second quarter. Over the previous 12 months, the home mortgage portfolio grew 16.7%. Corporate loan portfolio remained unchanged during the second quarter, following a total increase of 11.1% over the previous 12 months.
• Deposit stocks grew 6.5% during the second quarter, and growth for the previous 12 months was 4.5%.
• The ‘Fee and commission income and expenses (net)’ item increased in April-June by 14.7% and 11.5% in the January-June compared to the same period last year.
• In line with its strategy, the company sold most of its real estate holdings in June. As a result of the transaction, a total sales loss of EUR 2.3 million was recorded. In the same context, the company entered into long-term leases on business premises it sold and are in its own use. At the same time, the company signed long-term lease agreements for the business premises remaining in its own use. The sale of the real estate has no impact on the scope of customer services.
• Total operating income grew by 12.2% in Q2 and came to a total of EUR 23.6 (21.1) million. For the first half of the year, total operating income grew by 10.6% to EUR 53.6 (48.5) million.
• Impairment losses on financial assets were EUR 3.9 (2.3) million in the April-June and EUR 12.5 (3.6) million for the whole of the beginning of the year. The early year EUR 1.4 million can be explained by a group-specific additional loss allowance based on management judgement with which the company pre-emptively prepared for the impacts of the corona pandemic.
• The cost/ income ratio Q2 was 56.2 (56.5)% and the whole of the beginning of the year cost/income ratio was 51.3 (54.1)%. As a whole, the comparable cost/income ratio improved and was 55.6% (62.2%).
• The Q2 profit before taxes was EUR 6.5 (6.8) million. The comparable profit before taxes for April-June was EUR 7.3 (7.2) million.

The Group’s key figures (1,000 euros) 1-6/2020 1-6/2019 Δ % 2020 Q2 2019 Q2 Δ %
Net interest income 31,391 27,635 14% 1, 886 14,440 10%
Fee and commission income and expenses, net 14,042 12,592 12% 7,328 6,387 15%
Impairment losses on financial assets, net -12,453 -3,552 251% -3,922 -2,348 67%
Profit before taxes 13,678 18,696 -27% 6,457 6,804 -5%
Cost/income ratio, % 51.3 % 54.1% -5% 56.2 % 56.5% -1%
Balance sheet total 3,838,097 3,243,770 18% 3,838,097 3,243,770 18%
Equity 329,789 309,383 7% 329,789 309,383 7%
Return on assets (ROA) % 0.6% 1.1% -42% 0.6% 0.7% -14%
Return on equity (ROE) % 6.8% 10.8% -37% 6.5% 7.1% -9%
Earnings per share (EPS), EUR 0.38 0.55 -31% 0.18 0.18 0%
Common Equity Tier 1 (CET1) capital ratio % 16.4% 17.3% -5% 16.4% 17.3% -5%
Comparable profit before taxes 8,966 12,343 -27% 7,276 7,151 2%
Comparable cost/income ratio, % 55.6% 62.2% -11% 52.8% 55.6% 1%
Comparable return on equity (ROE) % 4.5% 6.6% -31% 7.3% 7.5% -3%

1) The calculation principles of the key figures are presented in note G15 of the interim report. Comparable profit is presented in the income statement.

Outlook for 2020 (unchanged):
The company’s business volumes are predicted to maintain their strong growth during the 2020 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. At the same time, the company has adapted its branch network to correspond even better to a changing operating environment. Due to the uncertainty caused by the coronavirus, the outlook for the economy changed and rapidly weakened towards the end of the first quarter. Due to the difficulty of assessing the financial impact of the situation, the company withdrew its February earnings guidance in March.

Despite the general economic uncertainty, the company’s financial position is strong and the flexible operating models allow rapid response to changes in the operating environment. The company’s earning is expected to increase during the FY2020 in both key sources of income, net interest income and fee and commission income. At the same time, operating costs are projected to remain approximately at current level, so the profit­ability of the company’s core business is expected to continue to improve in FY2020.

More detailed earnings guidance will be provided by the company as the outlook for the corona pandemic progression becomes clearer and the economic impact can be better assessed.

Oma Savings Bank Plc
Board of Directors

Additional information:

Pasi Sydänlammi, CEO, puh +358 45 657 5506,
Sarianna Liiri, CFO, puh. +358 40 835 6712,
Minna Sillanpää, CCO, tel. +358 50 66592,

Nasdaq Helsinki Ltd
Major media

OmaSp shortly
OmaSp is a growing Finnish bank and the largest savings bank in Finland based on total assets. About 300 professionals provide nationwide services through OmaSp’s 32 branch offices and digital service channels to 140,000 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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