Oma Savings Bank Plc's Financial Statements Release 1 January - 31 December 2019: Best result in history

17.02.2020 klo 10:30 Oma Savings Bank Plc's Financial Statements Release 1 January - 31 December 2019: Best result in history


Oma Savings Bank Plc’s Financial Statements Release 1 January – 31 December 2019: Best result in history

This release is a summary of Oma Savings Bank’s (OmaSp) January-December 2019 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: Best result in history

The year was a success and we achieved our best result in the history. We succeeded in increasing our operating income by 21.9% and our balance sheet increased during the accounting period by more than 17%, coming to almost EUR 3.5 billion. The sale of Samlink’s shares increased returns by EUR 5.3 million. The cost structure was impacted by, amongst other things, the investments in new offices and non-recurring costs for co-operation negotiations. Our profit before taxes for January–December was EUR 32.7 million, up 30.9%. Our comparative profit before taxes grew by 7.0% and was EUR 28.0 million.

The final quarter of the year was good, as expected, and we gave a positive profit warning concerning the earnings outlook for the entire accounting period. We increased operating income by 26.0% and at the same time we were able to curb the growth of operating expenses. Demand for home mortgages and corporate credit continued to be strong and the average loan margin remained practically unchanged. During the fourth quarter, changes were made to the calculation of expected credit losses with an impact of EUR -0.9 million. The Q4 profit before taxes grew 25.0% and was EUR 5.6 million. The comparative profit decreased by 11.4% to EUR 5.8 million.

Focusing on improving competitiveness
We have strengthened our position in key growth centres in Helsinki, Jyväskylä, Oulu and Turku. We moved into the new OmaSp bank building in Seinäjoki in December. As a result of the co-operation negotiations, which ended in December, a decision was made to merge six smaller office branches with nearby full-service branches.

We continuously explore the growth drivers of business and one key viewpoint is the continuous improvement of customer service. Development of digital services continues determinedly, and during the end of the year, new products were launched especially in mobile payments.

The development project for the next-generation banking platform has been ongoing for just under a year. For customers, the renewal of the banking platform based on Temenos technology means new products and services at a faster pace and an improved service experience in our diverse service channels.

Excellent foundation for a new decade
It is interesting to keep up with the changing financial sector operating environment, which offers our bank
numerous opportunities. In our view, interest rates will remain exceptionally low in the next few years. We are well prepared for the future and our business is built so that we will be able to succeed, no matter what the interest rate level. We are waiting for structural changes to take place in the sector and we would be happy to take part in discussions on the topic.

Despite a changing operating environment, OmaSp’s financial standing and foundation for 2020 are
excellent. We can count on OmaSp to succeed as an efficient and straightforward operator, no matter what the circumstances, although we are slightly concerned as we monitor the development of Finland’s national economy.

At the core of our strategy can be found satisfied customers and skilled personnel. Our successes have established our position as the Nordics’ fastest growing bank and we expect our profitable growth to continue also going forward. This profitable work also reflects positively on OmaSp’s market value. We foster a good customer experience, which for us means the best banking services.

We would like to offer our customers, personnel, owners and partners a heartfelt thank you for 2019!

January-December 2019
• Net interest income grew in October–December by 11.9% and in January–December by 16.6% compared to the same period last year.
• Home mortgage portfolio grew strongly: by 4.4% during October–December and 20.3% in January–December. At the same time, the corporate loan portfolio increased 6.2% and 21.3% respectively.
• Deposit stocks grew during the final quarter by 0.6% while growth for the entire year amounted to 13.9%.
• The ‘Fee and commission income and expenses (net)’ item increased in October–December by 32.2%
compared to the same period last year. The comparative period item was strained with the cost of IPO. Growth for the whole year amounted to 5.2%.
• Total operating income grew by 26.0% in October–December and came to a total of EUR 23.0 (18.2) million. Total operating income for the entire year grew by 22.0% and came to a total of EUR 92.6 (76.0) million.
• Impairment losses on financial assets were EUR 3.6 (0.2) million in October–December. The corresponding item in January–December was EUR 9.6 (3.7) million.
• The cost/income ratio improved clearly compared to 2018 and came to 59.5% (74.0%) in October–December and 54.4% (62.2%) for the whole year. The comparative cost/income ratio was 56.7% (61.1%) for the whole year.
• The Q4 profit before taxes grew 25.0% compared to the comparative period, totalling EUR 5.6 (4.5) million. Profit before taxes for the whole year was EUR 32.7 (25.0) million, an increase of 30.9% year-on-year.
• Comparative profit before taxes for October-December decreased by 11.4% compared with the comparative period to EUR 5.8 (6.6) million. During the fourth quarter, changes were made to the calculation of expected credit losses with an impact of EUR -0.9 million. The effect of the change has not been taken into account in a comparative result. Comparative profit before taxes for the whole year increased by 7.0% to EUR 28.0 (26.2) million.

The Group's key
figures (1,000 euros) 1-12/2019 1-12/2018 Δ% 2019 Q4 2018 Q4 Δ% Net interest income 57,522 49,351 17% 15,020 13,426 12% Fee and commission income and expenses, net 25,414 24,158 5% 6,327 4,785 32% Impairment losses on financial assets, net - 9,567 - 3,746 155% - 3,644 -  196 1757% Profit before taxes 32,684 24,976 31% 5,646 4,516 25% Cost/income ratio, % 54.4% 62.2% -13% 59.5% 74.0% -20% Balance sheet total 3,416,530 2,914,661 17% 3,416,530 2,914,661 17% Equity 319,865 290,330 10% 319,865 290,330 10% Return on assets (ROA) % 0.9% 0.7% 20% 0.5% 0.5% 3% Return on equity (ROE) % 9.0% 7.6% 18% 5.7% 5.5% 4% Earnings per share (EPS), euro 0.93 0.78 19% 0.16 0.13 19% Common Equity Tier 1 (CET1) capital ratio % 16.8% 18.4% -9% 16.8% 18.4% -9 %               Comparable profit before taxes 28,045 26,210 7% 5,835 6,583 -11% Comparable cost-to-income ratio, % 56.7% 61.1% -7% 57.0% 66.1% -14% Comparable return on equity (ROE) % 7.4% 8.0% -8% 5.9% 7.9 % -26%

Outlook for the 2020 accounting period:
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. In addition, the company has adapted its branch network to correspond even better to a changing
operating environment.

Oma Savings Bank Plc provides earnings guidance on the comparative profit before taxes and the profit before taxes. A verbal description is used to make a comparison with the comparative 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 2020 accounting period:
Provided that profitable growth continues, the company estimates that the Group’s comparative profit before taxes and profit before taxes for 2020 will remain unchanged or 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 2019, a dividend
of EUR 0.19 be paid from the parent company’s distributable profits for each share entitling the shareholder to dividend for 2019. The Board’s proposal complies with the company’s dividend policy. All of shares outstanding on the dividend record date are entitled to a dividend for 2019.

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

General Meeting
Oma Savings Bank Plc’s Annual General Meeting will be held on Monday, 27 April 2020. The Board of Directors shall convene the Annual General Meeting separately.

Oma Savings Bank Plc

Additional information:
Pasi Sydänlammi, CEO, puh +358 45 657 5506, pasi.sydanlammi@omasp.fi
Sarianna Liiri, CFO, puh. +358 40 835 6712, sarianna.liiri@omasp.fi

Additional information and interview requests for media:
Minna Sillanpää, CCO, tel. +358 50 66592, minna.sillanpaa@omasp.fi

Nasdaq Helsinki Ltd
Major media

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.


OmaSp Financial Statements Release 2019