Greetings from CEO

Exceptional period in the history of OmaSp

The beginning of the year, and especially the second quarter, has been a very exceptional period in the history of OmaSp. The non-compliance with the guidelines and the resulting problem entity has required significant resources. In recent weeks, the implementation of the action plan has been in the centre of activities, during which extensive studies have been carried out and the quality of the entire credit portfolio has been ensured in cooperation with external independent experts. The results confirm that the problems are limited to previously identified non-compliance with the guidelines and the rest of the quality of the credit portfolio corresponds to what was previously reported. Nevertheless, the most important thing is that the core business develops well and in line with expectations. The bank's capital adequacy and financial position are strong.

Supported by the interest environment, net interest income increased by 7 percent in the second quarter compared to last year. Fee and commission income and expenses remained at the comparison period's level. Comparable operating income increased by 7 percent. Costs have remained well under control, even though we have made investments, and, among other things, we have increased personnel to risk management and the new branches to be opened in autumn 2024. Comparable operating expenses increased by 4 percent in the second quarter. The comparable cost/income ratio was at an excellent level of 32.9 percent for the second quarter.

The development of the credit portfolio was in line with expectations and remained at the previous year's level. The deposit base decreased by about 7 percent, and the development continues to reflect customers' adjustment to the rise in the cost level and partly because of bank-related news. The good accessibility of services is still reflected in the number of new customer relationships. We have managed to create about a thousand new customer relationships every month throughout the first half of the year.

We announced the non-compliance with the guidelines in lending in April. The Board of Directors initiated extensive measures as a result of serious events in the early part of the year. The Board of Directors and the entire personnel have had a strong will to investigate the events and related problems as efficiently as possible. During the second quarter, the development of risk management and independent operations, among other things, has been subject to a review of the entire credit portfolio carried out in July. During the second quarter, investments have been made, among other things, in the development of risk management and independent operations, and the key measure has been the review of the entire loan portfolio carried out in July. The survey work has gone through the data of the credit portfolio, carried out a documentary check and, in addition, analysed the credit and collateral process. It was important to get external confirmation that the majority of our credit portfolio corresponds to what was previously reported and that the review did not reveal any new problems beyond those already identified. A study confirmed the result of our own internal investigation that this is an individual case. OmaSp recorded EUR 49.5 million discretionary credit loss provisions related to this entity for the entire first half of the year. This is a key explanation for the impairment losses on financial assets in the early part of the year, which amounted to approximately EUR 62.5 million. 

The comparable profit before taxes was EUR 31.1 million for the first part of the year and, without additional allowance based on management’s judgement, EUR 80.6 million. The equity was approximately EUR 533 million at the end of June. The bank has a strong solvency position with a total capital (TC) ratio of 16.6%.

Looking ahead 

OmaSp's financial position is strong. We will focus on measures that will ensure the continued success of the bank.

The transaction with Handelsbanken Finland will be completed as planned at the turn of August-September and we are preparing to welcome more than 11,000 SME customers and approximately 30 corporate customer business experts to our team. We will continue to strengthen our market position and expand our operations to Vantaa, Kuopio and Vaasa during autumn 2024 as planned. 

Despite a very exceptional start to the year, we will continue the current financial year with skilled and committed personnel. We are now starting to build the next phase of OmaSp. Our goal is to continue to provide the best banking service in town every day for both current and future customers.

Sarianna Liiri
CEO