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Oma Savings Bank Plc's Financial Statements Release 1 January - 31 December 2020: Rapid growth of the business continued and the profit rose to a new record level
OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 8 FEBRUARY 2021 AT 8.30 A.M. EET, FINANCIAL STATEMENTS RELEASE
Oma Savings Bank Plc’s Financial Statements Release 1 January – 31 December 2020: Rapid growth of the business continued and the profit rose to a new record level
This release is a summary of Oma Savings Bank’s (OmaSp) January-December 2020 Financial Statements Release, which can be read from the pdf file attached to this stock exchange release and on the company’s web pages www.omasp.fi
CEO Pasi Sydänlammi: Rapid growth of the business continued and the profit rose to a new record level
“The positive development of OmaSp's business continued to be excellent throughout the year, and new customer relationships were created at their best in well over a thousand a month. Despite exceptional times, we have been able to guarantee customers safe banking in their chosen service channel. Both main sources of income, net interest income and fee and commission income, continued strong growth.
During 2020, operating income increased by as much as 20% and at the same time expenses remained under control. In terms of the cost/income ratio, which describes the efficiency of banking operations, we achieved an excellent level of 46.6%. For the first time, the balance sheet total exceeded the EUR 4 billion threshold, ending at EUR 4.4 billion. The balance sheet grew by a record EUR 965 million during the financial year. The profit before taxes for January-December increased by 15% to EUR 37.7 million.
Profit before taxes for the fourth quarter increased by 87% over the comparative period and was EUR 10.5 million. The comparable profit before taxes was EUR 2 million better than in the comparative period.
The quality of the loan portfolio has remained at a good level. We have also been prepared for the possible effects of the corona pandemic and increased the loss allowance based on management's judgement in the fourth quarter to EUR 4.4 million. The allowance is fully available.
Personnel and customer satisfaction at record high
Our bank's competitiveness is based on excellent customer experience and the skills of our personnel. According to the results of the annual personnel survey, the overall satisfaction of our personnel has reached a record high level. The customer survey results highlighted first-class service experience and high levels of satisfaction with their own contact person, among other things.
Positive outlook for 2021
We will be able to start the new financial year again from an excellent starting point. Merger negotiations with Eurajoen and Mietoinen Savings Banks, which started at the end of the year, are progressing as planned. The changing operating environment in the financial sector and evolving technology offer our bank many interesting opportunities.
We expect the profitability of the bank's core business to improve further and earnings growth to continue in 2021. Rapid responsiveness, as well as a strong financial position, will enable profitable growth also in the future.
Warm thanks to customers, personnel, owners and partners for 2020!”
January-December 2020
• Net interest income increased 25.8% in October-December and 17.9% in January-December compared to the same period last year.
• The loan portfolio increased 4.8% in October-December and by 16.0% throughout the year.
• Deposit stocks grew during the final quarter by 6.4% while growth for the previous 12 months was 18.9%.
• Total operating income grew by 35.5% in the fourth quarter and came to a total of EUR 31.1 (22.9) million. During the financial year the total operating income grew by 20.0% to EUR 111.1 (92.6) million.
• Impairment losses on financial assets were 7.6 (3.6) in October-December. The increase was mainly affected by additional loss allowance based on management’s judgement for the corona pandemic. Impairment losses on financial assets were EUR 21.6 (9.6) million for the whole of the year.
• The cost/income ratio in the fourth quarter was 41.3 (59.5)% and the cost/income ratio for the financial year 2020 was 46.6 (54.4)%. The comparable cost/income ratio improved for the year 2020 and was 51.2 (57.9)%.
• The fourth quarter profit before taxes was EUR 10.5 (5.6) million. Profit before taxes for the whole financial year was EUR 37.7 (32.7) million.
• The comparable profit before taxes for the fourth quarter increased compared with the comparative period and was EUR 6.9 (5.3) million. The comparative profit before taxes grew compared to the same period last year and was EUR 26.7 (26.2) million.
The Group's key | 1-12/2020 | 1-12/2019 | Δ% | 2020 Q4 | 2019 Q4 | Δ% |
Net interest income | 67,819 | 57,522 | 18% | 18,890 | 15,020 | 26% |
Fee and commission income and expenses, net | 29,257 | 25,414 | 15% | 8,332 | 6,327 | 32% |
Total operating expenses | -51,676 | -50,309 | 3% | -12,758 | -13,641 | -6% |
Impairment losses on financial assets, net | -21,587 | -9,567 | 126% | -7,602 | -3,644 | 109% |
Profit before taxes | 37,707 | 32,684 | 15% | 10,541 | 5,646 | 87% |
Cost/income ratio, % | 46.6% | 54.4% | -14% | 41.3% | 59.5% | -31% |
Balance sheet total | 4,381,999 | 3,416,530 | 28% | 4,381,999 | 3,416,530 | 28% |
Equity | 353,493 | 319,865 | 11% | 353,493 | 319,865 | 11% |
Return on assets (ROA) % | 0.8% | 0.9% | -9% | 0.9% | 0.5% | 73% |
Return on equity (ROE) % | 9.1% | 9.0% | 1% | 10.4% | 5.7% | 82% |
Earnings per share (EPS), EUR | 1.04 | 0.93 | 12% | 0.31 | 0.16 | 98% |
Common Equity Tier 1 (CET1) capital ratio % | 15.9% | 16.8% | -5% | 15.9% | 16.8% | -5% |
Comparable profit before taxes | 26,729 | 26,228 | 2% | 6,910 | 5,270 | 31% |
Comparable cost/income ratio, % | 51.2% | 57.9% | -12% | 46.5% | 58.5% | -21% |
Comparable return on equity (ROE) % | 6.5% | 6.9% | -6% | 7.0% | 5.3% | 33% |
Outlook for the 2021 accounting period:
The company estimates that profitable growth will continue to be strong despite overall economic uncertainty and the group's 2021 profit before taxes and comparable profit before taxes will grow compared to the previous accounting period.
Board of Directors’ proposal for the distribution of profit:
The Board of Directors proposes that, based on the financial statements to be approved for 2020, a dividend of EUR 0.24 be paid from the parent company’s distributable profits for each share entitling the shareholder to dividend for 2020. The Board’s proposal complies with the company’s dividend policy. In addition, the Board of Directors proposes to pay a dividend of EUR 0.06 on each share entitling to a dividend for 2020 in respect of dividends not paid for 2019 due to the authority's profit-sharing restrictions. Dividends will be paid upon completion of the authority’s profit-sharing restrictions. All of shares outstanding on the dividend record date are entitled to a dividend for 2020. The dividend record and payment date shall be communicated separately. No significant changes took place in the company’s financial position after the end of the accounting period. The company’s liquidity is good, and the proposed profit distribution does not compromise the company’s liquidity according to the Board of Directors’ insight.
General Meeting
Oma Savings Bank Plc’s Annual General Meeting will be held on Tuesday 30 March in 2021. The Board of Directors will convene the Annual General Meeting separately.
Oma Savings Bank Plc
Additional information:
Pasi Sydänlammi, CEO, puh +358 45 657 5506, pasi.sydanlammi@omasp.fi
Sarianna Liiri, CFO, puh. +358 40 835 6712, sarianna.liiri@omasp.fi
Minna Sillanpää, CCO, tel. +358 50 66592, minna.sillanpaa@omasp.fi
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.omasp.fi
OmaSp is a growing Finnish bank and the largest savings bank in Finland based on total assets. About 300 professionals provide nationwide services through OmaSp’s 32 branch offices and digital service channels to 140,000 customers. OmaSp focuses primarily on retail banking operations and provides its clients with a broad range of banking services both through its own balance sheet as well as by acting as an intermediary for its partners’ products. The intermediated products include credit, investment and loan insurance products. OmaSp is also engaged in mortgage banking operations.
OmaSp core idea is to provide personal service and to be local and close to its customers, both in digital and traditional channels. OmaSp strives to offer premium level customer experience through personal service and easy accessibility. In addition, the development of the operations and services is customer-oriented. The personnel is committed and OmaSp seeks to support their career development with versatile tasks and con-tinuous development. A substantial part of the personnel also own shares in OmaSp.
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