The bank has defined precise risk management processes, risk-taking limits and guidelines for staying within the defined limits. OmaSp maintains a strict credit policy. An internal credit rating is assigned to each customer and the majority of OmaSp's loan portfolio are loans from internally rated AAA – A (1) customers. OmaSp's credit risk is also limited by the large share of secured loans in the loan portfolio, the limited weight of individual customers in total exposures and geographical diversification. OmaSp also maintains low borrowing rates (LTV) in its loans to minimize credit losses.
The risks related to the company's operations are widely diversified from the perspective of both the customer base and geographical locations. Given OmaSp's diversified customer base and the high share of secured loans, the bank is exposed to relatively limited risks from individual customers. The bank's loan portfolio is also relatively geographically diversified, limiting the impact of local economic shocks on the company.
OmaSp operates in many growth centers with a favorable economic outlook and a vibrant housing market. Housing prices and the relative indebtedness of households are higher in these areas compared to the rest of Finland. On the other hand, OmaSp also operates in many smaller locations where the economic outlook is less favorable than average. However, house prices in these locations are generally lower than in the rest of Finland and household indebtedness is low, lowering the likelihood of credit risks materializing in these locations. (2)
1) OmaSp classifies both its personal and corporate customers into AAA (highest credit rating) to D (lowest credit rating or unrated). The Company uses its own and publicly available customer data for its internal credit rating, on the basis of which the bank makes an independent credit rating of the customer. 2) Breakdown of loan portfolio by size of customer total liability by parent company figures.