Oma Savings Bank Plc’s Interim Report 1.1.-31.3.2023: Best quarter in history – Comparable profit before taxes increased 21%
OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 2 MAY 2023 AT 8.30 A.M. EET, INTERIM REPORT Q1
Oma Savings Bank Plc’s Interim Report 1.1.-31.3.2023: Best quarter in history – Comparable profit before taxes increased 21%
This release is a summary of Oma Savings Bank’s (OmaSp) January-March 2023 Interim Report, which can be read from the pdf file attached to this stock exchange release and on the Company’s web pages
CEO Pasi Sydänlammi: Best quarter in history – Comparable profit before taxes increased 21%
“The record result last year was followed by the best quarter in the company's history. The profit trend has improved month by month, with March being the single best month ever. In the first quarter, the business arrangement with Liedon Savings Bank was completed. The integration of the transitioning business has progressed as planned and it has increased OmaSp's profit accumulation as expected since the beginning of March.
Net interest income increased by 57% during the beginning of the year and was EUR 36.2 million. The development of net interest income was accelerated by the general rise in interest rates in addition to strong volume growth. Due to the challenging economic situation, fee and commission income and expenses increased by only 2% compared to the previous year. Total operating income increased by 47%.
Comparable cost/income ratio was 48% for the beginning of the year. The bank's first-quarter result is weighed down by annually recorded authority fees, which almost doubled from the previous year as the bank's business grew. The comparable cost/income ratio without authority fees was 39%, which is clearly one of the best in the industry.
The quality of the loan portfolio has remained at a good level, and the accumulation of credit losses has remained at a low level. During the first quarter, we recorded impairment losses only EUR 1.6 million. Our loan portfolio is well diversified geographically and by industry. The deposits increased by almost one billion euros due to the acquisition during the first quarter. Otherwise, the development of the deposit base has been stable.
For the first quarter, profit before taxes was EUR 23.3 million, an increase of 28% on the comparative period. Comparable profit before taxes increased by 21% to EUR 24.2 million. OmaSp's unique combination of growth and profitability materializes as a strong return on equity. For the beginning of the year, the comparable return on equity (ROE%) rose to as much as 19.3% and without authority fees up to 21.4%.
OmaSp continues the financial year from an excellent situation
OmaSp is a reliable banking partner for customers even in uncertain times. The company began to prepare for changes in the operating environment well in advance, as growing uncertainty about the future economic development could be seen. The bank's capital and liquidity buffers have been further strengthened during the beginning of the year. The problems of banks observed in United States and Switzerland have been seen in Finland so far mainly as nervousness of the capital market. The market's strong trust in the bank enabled successful issues in a challenging market environment.
We continue the financial year from excellent starting points. According to our profit guidelines, comparable profit before taxes will exceed EUR 100 million for the first time in the company's history.”
January-March 2023
• Net interest income grew strongly by 56.9% in January-March compared to the same period last year. Net interest income was increased especially by the rise of market interest rates, and in addition, the volumes increased as a result of the acquisition in March.
• The acquisition of Liedon Savings Bank’s business was carried out as planned at the beginning of March. The acquisition increased the Company’s balance sheet by a total of EUR 1.4 billion. The number of customers grew to more than 200,000 customers.
• Home mortgage portfolio increased by a total of 31.6% over the previous 12 months. Corporate loan portfolio increased by 37.0% over the previous 12 months.
• Deposit base grew by 30.0% over the previous 12 months.
• Fee and commission income and expenses (net) item increased due to volume growth by 2.0% in January-March. The moderate growth in fee and commission income was mainly the result of a slowdown in new lending due to uncertainty in the market.
• Total operating income grew by 46.8% compared to the previous year.
• Total operating expenses grew by 35.3% due to increased authority fees, corporate reorganization costs and the expansion of the branch network.
• Impairment losses on financial assets remained at a moderate level and were in total EUR -1.6 (2.5) million. In the comparison period, a positive profit impact due to model changes was recorded as ECL decreased, which explains the change from the previous year.
• For the first quarter, profit before taxes grew and was in total EUR 23.3 (18.2) million. The growth was 27.8% compared to the previous year.
• For the first quarter, comparable profit before taxes grew 20.7% compared to the previous year and was in total EUR 24.2 (20.0) million.
• For the first quarter, cost/income ratio improved and was 50.7% (54.6%). Comparable cost/income ratio also improved and was 47.9% (51.9%).
• Comparable return on equity (ROE) improved and was 19.3% (16.8%) in the first quarter.
| The Group's key figures (1,000 euros) | 1-3/2023 | 1-3/2022 | Δ% | 1-12/2022 |
| Net interest income | 36,224 | 23,086 | 57% | 104,930 |
| Fee and commission income and expenses, net | 10,453 | 10,251 | 2% | 39,396 |
| Total operating expenses | -25,568 | -18,903 | 35% | -73,062 |
| Impairment losses on financial assets, net | -1,595 | 2,498 | -164% | -1,747 |
| Profit before taxes | 23,296 | 18,227 | 28% | 69,226 |
| Cost/income ratio, % | 50.7% | 54.6% | -7% | 50.7% |
| Balance sheet total | 7,298,953 | 5,518,011 | 32% | 5,941,766 |
| Equity | 437,357 | 371,118 | 18% | 364,961 |
| Return on assets (ROA) % | 1.1% | 1.1% | 3% | 1.0% |
| Return on equity (ROE) % | 18.6% | 15.3% | 22% | 14.5% |
| Earnings per share (EPS), EUR | 0.59 | 0.49 | 19% | 1.85 |
| Total capital (TC) ratio % | 15.5% | 14.7% | 5% | 14.9% |
| Common Equity Tier 1 (CET1) capital ratio % | 13.6% | 14.6% | -7% | 13.3% |
| Comparable profit before taxes | 24,157 | 20,013 | 21% | 75,850 |
| Comparable cost/income ratio, % | 47.9% | 51.9% | -8% | 48.0% |
| Comparable return on equity (ROE) % | 19.3% | 16.8% | 15% | 15.8% |
Outlook for the financial year 2023 (unchanged)
The Company estimates that profitable growth will continue to be strong. The Group's 2023 comparable profit before taxes will increase significantly compared to the previous financial year and will exceed EUR 100 million.
Oma Savings Bank Plc
Additional information:
Pasi Sydänlammi, CEO, puh 6,
Sarianna Liiri, CFO, puh. +358 40 835 6712,
Minna Sillanpää, CCO, tel. ,
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
OmaSp is a growing Finnish bank and the largest savings bank in Finland based on total assets. About 450 professionals provide nationwide services through OmaSp’s 45 branch offices and digital service channels to over 200,000 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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