OMA SAVINGS BANK PLC, PUBLIC RELEASE AUGUST 1, 2022 AT 8:30 AM EET, HALF-YEARLY FINANCIAL REPORT
Oma Savings Bank Plc Semester Financial Report 1.1.-30.6.2022: Profitable Growth Continues – Comparable Earnings Before Tax Increased 47% YTD
This press release is a summary of Oma Savings Bank’s (OmaSp) half-year financial report for January to June 2022, which can be read from the pdf file attached to this stock market release. In addition, alongside the half-yearly financial report, the Company also publishes information on capital adequacy and risk management in accordance with Pillar III in a separate report, available as an attached pdf file. Both reports are also available on the Company’s website at www.omasp.fi.
CEO not Sydanlammi:
“OmaSp’s the development of the activity continues to be excellent and we can be very satisfied with the results at the start of the year. Demand remained strong across all key product areas, and personal and business loan volume growth remained strong. About a thousand new customer relationships are created each month, and the number of customers stands at 160,000 at the end of June.
The performance of the two main sources of income, net interest income and fee and commission income, remained solid. During the first financial year, net interest income increased by 26% and fee and commission income by 27% compared to the previous year.
The strong performance of the business is reflected in the return on equity. From January to June, the return on equity (ROE%) was 13.7% and the comparable return on equity (ROE%) reached 15.4%.
The balance sheet increased by more than 1 billion compared to the comparison period and amounted to 5.9 billion euros. For the beginning of the year, profit before tax amounted to 32.2 million euros and remained at -36% compared to the comparison period. Last year, an exceptionally large exceptional item of approximately 22 million euros was recorded. Comparable profit before tax increased by 47% to EUR 36.2 million, an increase of more than EUR 11 million compared to the comparative period.
For the second quarter, the comparable profit before tax increased by 10% and amounted to 16.2 million euros.
We continue the year from great starting points
Merger negotiations with Liedon Savings Bank are proceeding as planned. The goal is to implement the largest corporate reorganization in our bank’s history between November and December. The acquisition of the company significantly strengthens the market position and service network of OmaSp in the economic zone of Turku and throughout southwestern Finland. The merger will increase OmaSp’s balance sheet by around 1.4 billion euros. We have estimated that the arrangement will increase annual earnings by approximately 15 to 20 million euros over the next few years. The volume growth will further improve the company’s profitability and profitability.
The authorization process for applying the IRB approach to capital adequacy is progressing on the basis of dialogue with the supervisor. With the IRB approach, the use of capital will become more efficient in the years to come and put OmaSp in a position comparable to benchmark banks.
Investments to ensure future competitiveness and our investments in customer service and improving the customer experience will continue. The extensive expansions of the Helsinki and Tampere branches were completed in late spring and in late autumn a new branch will open in the Espoo Iso Omena shopping center, one of the busiest shopping centers popular in Finland.
So far, the direct effects of the Russian invasion war have been limited on OmaSp’s operations and so far it has not affected demand. The situation is generally reflected in the economic environment by an acceleration of inflation and a rise in interest rates, which means for the bank an increase in net interest income and an improvement in profitability.
I have been allowed to be involved in the success story of OmaSp for already fifteen years, and during this time OmaSp has grown from a small local bank to a listed company. Today, our business is a unique combination of growth and profitability. The bank’s financial situation is solid and we are continuing the exercise from an excellent starting point.
January June 2022
• Net interest income rose sharply by 25.6% in January-June compared to the same period last year. In the second quarter, net interest income increased by 23.2%.
• The residential mortgage portfolio increased by a total of 24.9% over the previous 12 months. At the same time, the business loan portfolio increased by 42.9%.
• Deposit inventories have increased by 21.0% over the past 12 months.
• Income and expenses (net) of fees and commissions increased due to volume growth of 27.3% in January-June. In the second quarter, income and expenses (net) of fees and commissions increased by 25.0%.
• Impairment losses on financial assets (net) decreased at the beginning of the year and a positive impact of EUR 1.1 (-3.6) million was recorded for this item. During the second quarter, impairments of financial assets (net) amounted to EUR -1.4 (-0.8) million.
• In January-June, profit before tax decreased due to a single significant positive element recorded during the comparative period 2021 (EUR 22.3 million). For the beginning of the year, profit before tax amounted to 32.2 (50.0) million euros.
• For January-June, the comparable profit before tax increased significantly compared to the comparative period and amounted to 36.2 (24.7) million euros.
• For the second quarter, profit before tax amounts to 13.9 (38.3) million euros. For the second quarter, the comparable profit before tax increased and amounted to 16.2 (14.6) million euros.
• For January-June, the cost/income ratio weakened and stood at 54.7% (38.0%). For the beginning of the year, the comparable cost/income ratio was 51.6% (49.6%).
• For the second quarter, the cost/income ratio was 54.7% (32.0%). The comparable cost/income ratio was 51.4% (47.0%).
• Comparable return on equity (ROE) improved to 15.4% (10.6%) from January to June. For the second quarter, the comparable return on equity (ROE) was 14.2% (12.6)%.
|Group key figures (1,000 euros)||1-6/2022||1-6/2021||∆%||2022 Q2||2022 Q2||∆%|
|Net interest income||47,316||37,668||26%||24,229||19,669||23%|
|Income and expense from fees and commissions, net||20,981||16,485||27%||10,730||8,583||25%|
|Total operating expenses||-37,424||-32,834||14%||-18,521||-18,422||1%|
|Impairment losses on financial assets, net||1,126||-3,603||-131%||-1,372||-813||69%|
|Cost/revenue ratio, %||54.7%||38.0%||44%||54.7%||32.0%||71%|
|Total balance sheet||5,890,317||4,776,891||23%||5,890,317||4,776,891||23%|
|Equity||355,874||383 434||-seven%||355,874||383 434||-seven%|
|Return on assets (ROA) %||0.9%||1.7%||-46%||0.8%||2.6%||-70%|
|Return on equity (ROE) %||13.7%||21.6%||-37%||12.2%||33.1%||-63%|
|Earnings per share (EPS), EUR||0.86||1.34||-36%||0.37||1.03||-64%|
|Common Equity Tier 1 (CET1) ratio %||13.2%||16.4%||-20%||13.2%||16.4%||-20%|
|Comparable profit before tax||36,171||24,679||47%||16,158||14,636||ten%|
|Comparable cost/income ratio, %||51.6%||49.6%||4%||51.4%||47.0%||9%|
|Comparable return on equity (ROE) %||15.4%||10.6%||45%||14.2%||12.6%||13%|
Outlook for the 2022 accounting period (unchanged)
The Company believes that profitable growth will continue to be strong. The Group’s 2022 comparable pre-tax result will increase compared to the previous year.
Oma Savings Bank Plc
board of directors
Nasdaq Helsinki Ltd
OmaSp is a growing Finnish bank and Finland’s largest savings bank by total assets. About 330 professionals provide services nationwide through OmaSp’s 35 branches and digital service channels to 160,000 private and corporate customers. OmaSp focuses primarily on retail banking operations and offers its customers a wide range of banking services both through its own balance sheet and by acting as an intermediary for its partners’ products. Intermediated products include credit insurance, investment and loan products. OmaSp is also engaged in mortgage banking.
The central idea of OmaSp is to provide personalized service and to be local and close to its customers, both in digital and traditional channels. OmaSp strives to provide a high level customer experience through personalized service and easy accessibility. In addition, the development of operations and services is customer-oriented. Staff are engaged and OmaSp seeks to support their career development with cross-functional tasks and continuous development. A substantial part of the staff also owns OmaSp shares.
Half-year financial report OmaSp June 30, 2022
PILLAR III Disclosure Report on capital adequacy and risk management June 30, 2022