Greetings from CEO

“Despite ongoing economic uncertainty reflected in our business we have maintained a robust operational foundation and delivered a solid result in the third quarter. Our customers continued to exercise caution, with demand for housing loans remaining subdued and investment appetite among SMEs at a low level.

We have continued our determined work to streamline the Company’s processes. During the third quarter, we advanced risk management and internal operating model development projects. The action plan initiated in the second quarter to address the observations made by the supervisor in February will continue until the end of 2025, and EUR 1.7 million related costs were recorded for the third quarter. Also, the controlled winding down portfolio related to non-compliance with the guidelines was advanced, and investigation costs of EUR 0.5 million were recorded.

The comparable result before taxes for the third quarter was EUR 16.1 (27.6) million. As anticipated, the result was weighed down by the decline in net interest income and the increase in operating expenses. The comparable cost/income ratio for the third quarter was 50.1 per cent (36.8). Earnings per share were EUR 0.37.

Comparable operating expenses increased in the third quarter by 10.7 per cent to EUR 26.3 (23.8) million, primarily due to the growth in the number of personnel and branch network expansion. In addition, the Company has several development projects underway to improve risk management processes and to implement the measures required by the supervisor. During the third quarter, however, expenses decreased compared to earlier in the year, as planned.

A smaller loan portfolio and a reduction in market interest rates led to a 23.2 per cent decrease in net interest income, totalling EUR 40.2 (52.4) million.

Fee and commission income and expenses (net) increased by 2.5 per cent to EUR 12.5 (12.2) million, driven mainly by a higher fee and commission income from lending and fund savings. Growth was also supported by the pick-up in capital markets after market swings in the early part of the year.

The mortgage loan portfolio decreased by 3.7 per cent, and the corporate loan portfolio by 17.9 per cent year-on-year. The deposit portfolio decreased by 0.7 per cent.

The challenges in the operating environment are reflected in the quality of the loan portfolio. However, impairment losses on financial assets decreased by 23.8 per cent to EUR -10.1 (-13.3) million. The general economic situation continues to affect the SME sector in particular and is reflected in increased payment difficulties.

Our strength is based on personal and accessible banking services

Oma Savings Bank’s nationwide branch network serves both private and corporate customers in Finland’s key growth and regional centres. This autumn, we expanded several branches to meet growing demand, reaffirming our commitment to personal and accessible banking services.

Our customer-centric approach continues to be recognised, with customer satisfaction remaining high. In the latest EPSI Rating bank survey, we were ranked third for private customer satisfaction, well above the industry average. Customers report feeling valued, receiving the support they need, and perceiving good value for their money.

Nonetheless, we recognise opportunities to improve corporate customer satisfaction and are actively enhancing our service quality to better meet their expectations. 

In September, S&P Global Ratings affirmed Oma Savings Bank Plc’s credit rating remaining at BBB/A-2, while updating the outlook from stable to negative, particularly due to an increase in non-performing loans (NPLs). S&P expects credit quality to improve gradually, but slowly. In response, during the third quarter we confirmed a plan to reduce the number of NPLs. 

The unsecured senior-term bond of EUR 200 million was issued in September under our bond program. It will cover the MREL requirement that will come into effect next year in advance. The bond attracted strong demand with the order book exceeding EUR 600 million, demonstrating investor confidence in our Company. 

Our personnel is our most valuable asset. Throughout the autumn we have organised numerous events to foster competence and alignment. Regular employee surveys indicate excellent commitment and satisfaction, providing a robust foundation for our Company’s future success. I extend my sincere thanks to our personnel for their outstanding contributions also this quarter. 

Our Company’s financial position is strong. The total capital (TC) ratio strengthened to 19.2 per cent (15.6) at the end of September. The accumulated equity was EUR 605.2 (576.1) million. Common Equity Tier 1 (CET1) capital ratio reached 18.2 per cent, exceeding the current regulatory minimum by 8.9 percentage points. 

We are committed to building an even stronger bank and advancing consolidation measures as planned, while also striving to enhance efficiency and customer experience across all service channels. Our objective remains profitable growth, grounded in the Company’s core strengths.”

Karri Alameri
CEO