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Oma Savings Bank Plc's Interim Report 1.1.-30.9.2020: Profitability grows at record speed
OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 9 NOVEMBER 2020 AT 8.30 A.M. EET, INTERIM REPORT Q3
Savings Bank Plc’s Interim Report 1.1.-30.9.2020: Profitability grows at record speed
This release is a summary of Oma Savings Bank’s (OmaSp) January-September 2020 Interim Report, 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:
”Our business has continued strong and the quarter was the best in the bank’s history. In September, we issued a positive profit warning despite the general uncertainty in the operating environment. Our profitability has exceeded the previous peak prior to the corona crisis and the bank’s business profitability has improved even more than expected. In terms of the cost/income ratio that describes banking efficiency, we have achieved an excellent level of 43.2%.
Demand for home mortgages and corporate credit continued to be excellent throughout the year and the quality of the credit portfolio is at a good level. Our main sources of income have continued their strong growth. Net interest income rose a staggering 18% and fee and commission income increased 11.2% compared with a year ago.
Profit before taxes for the third quarter was EUR 13.5 million, an increase of 62% over the comparative period. Comparable profit before taxes also advanced superbly, reaching nearly EUR 11 million, which is EUR 2.2 million better than in the comparative period.
We support our customers’ success
The role of the financial sector in building Finnish prosperity is significant. Especially now, Finland needs successful businesses and a functioning national economy. As a prudential bank, we are able to support our customers in all circumstances. Our bank’s competitiveness is based on an excellent customer experience, the cornerstones of which are easy accessibility, the realisation of appointments at short notice and quick decisions. During the exceptional period, remote appointments and electronical signatures have also come to play a more important role. We continually evolve our operations while listening to our customers.
Favourable dividend outlook
With OmaSp’s strong financial situation, we have the desire and ability to pay a dividend in line with the AGM’s alignment as soon as the authorities lift the dividend payment restrictions on the entire industry. We continue to invest in profitable growth and expect our profitability to improve further.”
January-September 2020
• Net interest income increased 18.0% in July-September and 15.1% in January-September compared to the same period last year.
• The home mortgage portfolio has increased by a total of 4.9% during third quarter. Over the previous 12 months, the home mortgage portfolio grew 17.0%. Corporate loan portfolio increased 3.6% during the third quarter and 11.2% over the previous 12 months.
• Deposit stocks grew 4.5% during the third quarter and growth for the previous 12 months was 12.4%.
• Total operating income grew by 24.6% in the third quarter and came to a total of EUR 26.4 (21.2) million. For the whole of the beginning of the year the total operating income grew by 14.9% to EUR 80.0 (69.6) million.
• Impairment losses on financial assets were EUR 1.5 (2.4) million in July-September and for the whole of the year EUR 14.0 (5.9) million.
• The cost/income ratio Q3 was 43.2 (49.4)% and from the beginning of the year cost/income ratio was 48.6 (52.7)%. The comparable cost/income ratio improved for the whole of the beginning of the year and was 53.1 (57.7)%.
• The third quarter profit before taxes was EUR 13.5 (8.3) million. Profit before taxes for the whole beginning of the year was EUR 27.2 (27.0) million.
• The comparable profit before taxes for July-September was EUR 10.9 (8.6) million and for the whole beginning of the year EUR 19.8 (21.0) million.
The Group's key figures (1,000 euros) | 1-9/2020 | 1-9/2019 | Δ % | 2020 Q3 | 2019 Q3 | Δ % |
Net interest income | 48,929 | 42,503 | 15% | 17,539 | 14,868 | 18% |
Fee and commission income and expenses, net | 20,925 | 19,087 | 10% | 6,883 | 6,495 | 6% |
Total operating expenses | 38,918 | 36,668 | 6% | 11,394 | 10,466 | 9% |
Impairment losses on financial assets, net | -13,984 | -5,923 | 136% | -1,531 | -2,371 | -35% |
Profit before taxes | 27,166 | 27,038 | 0% | 13,488 | 8,342 | 62% |
Cost/income ratio, % | 48.6 % | 52.7% | -8% | 43.2% | 49.4% | -13% |
Balance sheet total | 3,952,766 | 3,370,459 | 17% | 3,952,766 | 3,370,459 | 17% |
Equity | 343,208 | 318,145 | 8% | 343,208 | 318,145 | 8% |
Return on assets (ROA) % | 0.8% | 1.0% | -20% | 1.1% | 0.8% | 34% |
Return on equity (ROE) % | 8.7% | 10.0% | -13% | 12.5% | 8.5% | 47% |
Earnings per share (EPS), EUR | 0.73 | 0.78 | -6% | 0.36 | 0.23 | 57% |
Common Equity Tier 1 (CET1) capital ratio % | 16.5% | 17.4% | -5% | 16.5% | 17.4% | -5% |
Comparable profit before taxes | 19,819 | 20,958 | -5% | 10,853 | 8,614 | 26% |
Comparable cost/income ratio, % | 53.1% | 57.7% | -8% | 48.0% | 48.8% | -2% |
Comparable return on equity (ROE) % | 6.3% | 7.3% | -14% | 10.0% | 8.8% | 14% |
Outlook for 2020 (unchanged)
The Company’s business volumes will continue strong growth in FY2020 despite the exceptionally uncertain economic environment. The Company’s profitable growth is supported by efforts in recent years to improve the customer experience and the availability of customer service through new digital service channels and opening of new units.
Oma Savings Bank Plc provides earnings guidance on the profit before taxes. A verbal description is used to make a comparison with the comparative period. Earnings guidance is based on the forecast for the entire year, which takes into account the current market and business situation. Forecasts are based on the management’s insight into the Group’s business development.
The company estimates that profitable growth will continue to be strong despite overall economic uncertainty and the Group’s 2020 profit before taxes will exceed the previous financial year’s level (EUR 32.7 million).
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 private and corporate 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 continuous development. A substantial part of the personnel also own shares in OmaSp.
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