Greetings from CEO

The year 2024 was very exceptional in the history of OmaSp. The development of both main sources of income, net interest income and fee and commission income and expenses net, continued in line with expectations. The cost/income ratio remained at a good level despite the significant investments made during the year in the development of risk management processes and the implementation of an extensive action plan. The acquisition of Handelsbanken AB's Finnish SME business, the expansion of the distribution network to Vaasa, Kuopio and Vantaa, and the launch of a new K-Business Credit card for SMEs in cooperation with K Group strengthened OmaSp's market position. 

As expected, changes in market interest rates were reflected in the development of net interest income during 2024, and net interest income increased by 8 percent for the whole year. Our customers value our personal and easily accessible service model. This was reflected in the development of the number of customers, which remained despite an exceptional year at a good level. With Handelsbanken's business acquisition, OmaSp gained approximately 10,000 new customers in the autumn, and in addition to this, approximately 1,000 new customer relationships were organically created every month. In particular, fee and commission income and expenses net were increased by card and payment fees, which grew by 10 percent from the previous year. Fee and commission income and expenses net increased in total by 7 percent for the full year. During the autumn, the focus of the business was especially on the reception of customers who transferred from Handelsbanken and the start of operations in three new branches. With the expanded distribution network OmaSp now has excellent coverage in all of Finland's key growth and provincial centers. 

OmaSp's loan portfolio and deposit base were boosted by volumes transferred from Handelsbanken. The portfolio of housing loans grew by 5 percent, corporate loan portfolio by 8 percent and deposits by 6 percent from a year ago. 

Profit before taxes was EUR 74.6 million and comparable profit before taxes was EUR 86.7 million for the full year. The balance sheet total was 7.7 billion euros at the end of the year.

Non-compliance with the guidelines required resources and investments

In the early part of the year, as a result of our own control processes, we detected non-compliance with the guidelines, as a result of which the bank's credit risk position deteriorated materially for certain customer groups. The event was motivated by a violation of instructions related to lending, as a result of which individual customer entities had been deliberately formed with incorrect and incomplete information. 

In June, the Board of Directors of OmaSp submitted an investigation request to the police for non-compliance with the guidelines and launched an extensive action plan as a result of serious incidents. One of the measures was to ensure the quality of the entire loan portfolio by external, independent experts. It was important to obtain external confirmation that the majority of OmaSp's loan portfolio corresponds to those previously reported and that the review did not reveal any new problems beyond those already identified. We were assured that the problem was limited to approximately EUR 240 million from OmaSp's loan portfolio and, in light of the specified information, was approximately four percent of the Company's EUR 6 billion loan portfolio.

Accumulation of impairment losses on financial assets was significantly affected by noncompliance with the guidelines and related additional allowances. In 2024, credit losses amounted to approximately EUR 84 million, of which approximately EUR 64 million were related to noncompliance with the guidelines. 

As a result of the events, key personnel in senior positions changed, and we made significant investments in risk management and renewed our lending process during the year. We invested in additional risk control resources, developed processes for independent operations, and supported the competence development of our personnel.

During the year 2024, EUR 8.3 million was invested in risk management processes, and comparable costs increased by 19% compared to the previous year. 

The Finnish Financial Supervisory Authority (FIN-FSA) carried out audits of the Company during 2024. The observations raised by the supervisor and the development targets already identified by the Company supported each other. The measures to develop the processes are proceeding well on schedule, and the goal is to complete the planned development measures planned during 2024 in the first half of 2025.
 

Customer and employee satisfaction at the center of everything 

OmaSp's competitive advantage has been and will continue to be built on excellent customer experience. According to research, customer and personnel satisfaction have remained at an excellent level as in previous years, despite the exceptional year. Our personnel is our most essential resource, so committed and motivated personnel play a vitally important role for OmaSp's future success. The renewed Board of Directors of the Company started its work in December, and we have got five experienced Board experts to strengthen the bank's operations. In addition, the Company’s new CEO, Karri Alameri, will start his work in April at the latest.

OmaSp's financial position is stable, and the Company's solvency and liquidity position is at a good level. The total capital (TC) ratio was 15.6 percent at the end of the year and the accumulation of equity was nearly EUR 580 million. 

After the changes implemented in 2024, we will now be able to focus on our core business and strengthen the customer experience of our existing and new customers. OmaSp's ambition is to enable and solve the needs of households and small and medium-sized enterprises in all areas of the bank's operations. The history of OmaSp stretches back 150 years. From these strong starting points, we will continue the year 2025 with confidence.

Warm thanks to all customers and owners, and especially to OmaSp’s personnel for 2024! 

Sarianna Liiri
CEO