OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 4 August 2025 AT 9.05 A.M. EET, HALF-YEAR FINANCIAL REPORT
Oma Savings Bank Plc's Half-Year Financial Report January-June 2025: Core business on a solid foundation - the improvement of operating models is progressing
This release is a summary of Oma Savings Bank's (OmaSp) January-June 2025 Half-Year Financial Report, which can be read from the pdf file attached to this stock exchange release. In addition, alongside with the Half-Year Financial Report, the Company also publishes Disclosure information on capital adequacy and risk management in accordance with the Pillar III as a separate report, available as an attached pdf file. Both reports are also available on the Company's website at www.omasp.fi.
CEO Karri Alameri: Core business on a solid foundation - the improvement of operating models is progressing
"The first half of the year has been a period of active and goal-oriented development work within our bank. Significant measures have been taken to strengthen risk management and to improve the regulatory compliance of our operations. Concurrently, the effects of declining interest rates and economic uncertainty have been reflected in our results. Despite this, our business is stable, and our financial position is strong.
Efforts to improve risk management and internal operating models are advancing. A new action plan was launched to address observations made by the supervisor in February, with expenses of EUR 2.6 million recorded in the second quarter. This action plan will continue until the end of 2025, laying the foundation for profitable and stable operations in the future. The controlled winding down portfolio is also progressing: the approximately EUR 240 million portfolio related to non-compliance with the guidelines reported a year ago has been reduced to approximately EUR 200 million through various arrangements, and work continues. The risk management action plan (the "Noste") was completed in March, and its effects are already visible in our practices.
The comparable profit before taxes for the second quarter was EUR 19.0 (5.5) million, in line with our expectations. The result was still weighed down by the decline in net interest income and the increase in operating expenses. The comparable cost/income ratio was 52.1 (32.9) percent in the second quarter.
Comparable operating expenses increased by 38.7 percent in the second quarter, amounting to EUR 30.5 (22.0) million. This increase in expenses is primarily due to the growth in the number of personnel and the expanded branch network, as well as the action plan related to the supervisor's observations.
Net interest income decreased by 16.1 percent compared to the comparison period, amounting to EUR 44.0 (52.4) million. This decrease is attributed to market interest rates and the reduction in the loan portfolio.
Fee and commission income and expenses (net) totalled EUR 12.4 (12.7) million, which is 2.2 percent less than in the comparison period.
The mortgage loan portfolio grew by 1.2 percent from the level of a year ago. Conversely, the loan portfolio of corporate customers decreased by 7.5 percent. The deposit portfolio grew by 7.9 percent.
Challenges in the operating environment are reflected in the quality of the loan portfolio. In the second quarter, impairment losses on financial assets were EUR -9.1 (-39.4) million, mainly due to increased payment difficulties caused by the general economic situation, especially in the SME sector.
Our goal is profitable growth and satisfied customers
The takeover of Handelsbanken's customers has been completed, and we are focusing even more on supporting our customers' daily lives. Oma Savings Bank's nationwide branch network serves private and corporate customers in Finland's key growth and regional centres.
Customer satisfaction has remained at a high level, and we are committed to developing expert customer service. Our goal is to build profitable growth with our current strengths - a customer-oriented service model, efficient processes, and responsible management.
The commitment of our personnel deserves special recognition, and I extend my gratitude to the entire staff for their excellent performance. The past period has once again demonstrated the dedication, skill, and cooperation within our organisation.
Our bank's financial position is strong. The total capital (TC) further strengthened in the second quarter, reaching 18.7 (15.6) percent at the end of June. The accumulated equity was EUR 591 (576) million.
I look to the future with confidence. We are focused on improving efficiency, enhancing the customer experience, and restoring trust through concrete actions. Development work continues persistently, and every action brings us closer to a result-driven and sustainable future."
| The Group's key figures (1,000 euros) | 1-6/2025 | 1-6/2024 | ? % | 1-12/2024 | 2025 Q2 | 2024 Q2 | ? % |
| Net interest income | 90,895 | 109,81 | -17% | 213,097 | 44,016 | 52,442 | -16% |
| Fee and commission income and expenses, net | 24,854 | 25,465 | -2% | 50,745 | 12,415 | 12,699 | -2% |
| Total operating income | 119,414 | 141,576 | -16% | 270,068 | 59,34 | 67,497 | -12% |
| Total operating expenses | -65,101 | -49,389 | 32% | -111,004 | -30,861 | -23,432 | 32% |
| Impairment losses on financial assets, net | -31,41 | -62,535 | -50% | -83,379 | -9,088 | -39,423 | -77% |
| Profit before taxes | 21,721 | 29,171 | -26% | 74,589 | 18,611 | 4,504 | 313% |
| Cost/income ratio, % | 55.1% | 35.0% | 57% | 41.3% | 52.7% | 34.8% | 51% |
| Balance sheet total | 7,366,337 | 7,284,410 | 1% | 7,709,090 | 7,366,337 | 7,284,410 | 1% |
| Equity | 590,742 | 533,259 | 11% | 576,143 | 590,742 | 533,259 | 11% |
| Return on assets (ROA) % | 0.5% | 0.6% | -27% | 0.8% | 0.8% | 0.2% | 326% |
| Return on equity (ROE) % | 5.9% | 8.7% | -32% | 10.7% | 10.0% | 2.6% | 287% |
| Earnings per share (EPS), EUR | 0.52 | 0.70 | -27% | 1.80 | 0.44 | 0.10 | 327% |
| Total capital (TC) ratio % | 18.7% | 16.6% | 13% | 15.6% | 18.7% | 16.6% | 13% |
| Common Equity Tier 1 (CET1) capital ratio % | 17.6% | 15.2% | 16% | 14.4% | 17.6% | 15.2% | 16% |
| Comparable profit before taxes | 23,603 | 31,136 | -24% | 86,656 | 18,986 | 5,51 | 245% |
| Comparable cost/income ratio, % | 53.3% | 33.5% | 59% | 37.8% | 52.1% | 32.9% | 58% |
| Comparable return on equity (ROE) % | 6.4% | 9.3% | -31% | 12.4% | 10.2% | 3.2% | 220% |
January-June 2025
- As a result of the decline in market interest rates and the decline in the loan portfolio, net interest income decreased by 16.1% in the second quarter and in January-June by 17.2% compared to the previous year.
- Mortgage portfolio increased by 1.2% during the previous 12 months. Corporate loan portfolio decreased by 7.5% during the previous 12 months.
- Deposit base increased by 7.9% over the past 12 months.
- In the second quarter, fee and commission income and expenses (net) decreased by 2.2% totalling EUR 12.4 (12.7) million. In January-June, fee and commission income and expenses (net) decreased by 2.4%. The development is mainly due to lower commission income related to lending and card business than in the comparison period.
- In the second quarter, total operating income decreased by 12.1% and in January-June by 15.7% compared to the comparison period. In the second quarter, comparable total operating income decreased by 11.5% and was EUR 59.4 million.
- In the second quarter, total operating expenses grew by 31.7%. The growth is mainly explained by the Company's increased number of personnel and the expanded branch network. In addition, the Company has ongoing development projects related to the improvement of risk management processes and measures required by the supervisor's observations. In January-June total operating expenses grew by 31.8%.
- In the second quarter, other operating expenses were in total EUR 17.2 (12.5) million and in January-June EUR 39.4 (28.9) million.
- In the first quarter, the Company received the supervisor's final reports on the supervisor's review as well as liquidity risk management and reporting conducted in 2024. In the second quarter, the Company started the implementation of the action plans to correct the observations made by the supervisor, and a total of EUR 2.6 million in expenses were recorded. The implementation of the action plans continues until the end of the financial year 2025. The risk management action plan (the "Noste") was completed during the first quarter and no related expenses were recorded in the second quarter. Investigation costs of EUR 0.3 million were recorded in relation to the promotion of measures in the controlled winding down of the portfolio related to non-compliance with the guidelines.
- In the second quarter, comparable total operating expenses grew by 38.7% and were EUR 30.5 (22.0) million.
- In the second quarter, the impairment losses on financial assets were in total EUR -9.1 (-39.4) million. Impairment losses are primarily attributable to increased payment difficulties stemming from the generally weak economic environment, particularly within the SME sector and, due to higher provision level under the ECL model as default durations have lengthened. During the comparison period, the Company recorded an additional discretionary allowance of EUR 30 million related to non-compliance with the guidelines and the outcome of the screening of the credit portfolio. For January-June, the total impairment losses on financial assets were EUR -31.4 (-62.5) million.
- In the summer of 2024, the Company announced a credit portfolio analysis related to the non-compliance with the guidelines, according to which the portfolio related to the non-compliance with the guidelines represented approximately 4% of the Company's credit portfolio, amounting to approximately EUR 240 million. In this regard, the Company launched a controlled winding down plan in the second half of 2024. As a result of various arrangements, the size of the credit portfolio related to non-compliance with the guidelines was approximately EUR 200 million on 30 June 2025, representing 3.4% of the total credit portfolio. In the future, the Company will report on the status of the credit portfolio related to non-compliance with the guidelines on a semi-annual basis.
- For the second quarter, profit before taxes was EUR 18.6 (4.5) million and comparable profit before taxes was EUR 19.0 (5.5) million.
- For January-June, profit before taxes was EUR 21.7 (29.2) million and comparable profit before taxes was EUR 23.6 (31.1) million.
In the second quarter, the cost/income ratio was 52.7 (34.8)% and in January-June, 55.1 (35.0)%.
In the second quarter, comparable cost/income ratio was 52.1 (32.9)% and in January-June, comparable cost/income ratio was 53.3 (33.5)%.
In the second quarter, comparable return on equity (ROE) was 10.2 (3.2)% and in January-June, 6.4 (9.3)%.
Total capital (TC) ratio was 18.7 (15.6)%.
Outlook for 2025 (updated on 15 June 2025)
Oma Savings Bank Plc (OmaSp) lowered its earnings guidance for year 2025 as the Company's cost level is expected to remain high throughout the 2025 financial year due to investments in risk management and quality processes, increased headcount, and efforts to address the findings of the Finnish Financial Supervisory Authority's (FIN-FSA) inspection. In addition, the update of the ECL model implemented during the first quarter has increased the level of credit loss provisions more than anticipated. Furthermore, fee and commission income is expected to grow more slowly than anticipated in the prevailing economic environment. The Company estimates the Group's comparable profit before taxes is EUR 50-65 million for the financial year 2025.
Business outlook and earnings guidance for the financial year 2025 (updated on 15 June 2025):
The outlook for the Company's business for the financial year 2025 is affected by the decline in market interest rates and the continued high level of costs due to IT investments and system improvements required by risk management and quality processes. In addition, the Company continues to invest in customer experience on different channels. The uncertainty of the operating environment and economic situation affects the development of balance sheet items and comparable profit for the financial year 2025.
Oma Savings Bank Plc provides earnings guidance on comparable profit before taxes for 2025. 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.
We estimate the Group's comparable profit before taxes to be EUR 50-65 million for the financial year 2025, (comparable profit before taxes was EUR 86.7 million in the financial year 2024).
Oma Savings Bank Plc
Additional information:
Karri Alameri, CEO, tel. +358 45 656 5250, karri.alameri@omasp.fi
Sarianna Liiri, CFO, tel. +358 40 835 6712, sarianna.liiri@omasp.fi
Pirjetta Soikkeli, CCO, tel. +358 40 750 0093, pirjetta.soikkeli@omasp.fi
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.omasp.fi
OmaSp is a solvent and profitable Finnish bank. Over 600 professionals provide nationwide services through OmaSp's 48 branch offices and digital service channels to over 200,000 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.
Attachments
OmaSp Half-Year Financial Report 30 June 2025
OmaSp Pillar III Disclosure Report on capital adequacy and risk management 30 June 2025
