OMA SAVINGS BANK PLC, PRESS RELEASE ON FEBRUARY 7, 2022 AT 8:30 AM EET, RELEASE OF FINANCIAL STATEMENTS
Oma Savings Bank Plc Publication of financial statements 1 January – 31 December 2021: Record year in all key figures
This release is a summary of Oma Savings Bank’s (OmaSp) January-December 2021 financial statement 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 Sydanlammi: Record year in all key figures
“Overall, 2021 was a year of strong growth for OmaSp and all key figures reached new records. The profitable growth that has continued year on year is reflected in the accumulation of equity, which allows for future investment and an even greater distribution of profits to owners.
The continuation of earnings and business performance throughout the start of the year also continued into the fourth quarter of the year. In addition, the acquisition of the activities of Eurajoen Savings Bank was finalized in December, which will have a positive impact on the profit of approximately 14 million euros in total. Of this amount, 7.5 million euros were recorded for the 2021 financial year. The comparable profit before tax for the last quarter increased by almost 110% compared to the comparison period and amounted to 14.5 millions of euros. The comparable return on equity stands at a good level of 12%.
2021 as a whole was a great year and we broke all previous revenue records. Demand for residential mortgages and business loans was strong, and the quality of the loan portfolio improved further. The residential mortgage portfolio grew nearly 30% year-on-year, and the growth rate was about seven times the market rate. Excluding the acquisition of the activities of Eurajoen Savings Bank, the growth of the mortgage loan portfolio was 20%. The two main sources of income developed strongly throughout the year; Net interest income increased by 18% and fee and commission income and expenses by 15%. The comparable cost/income ratio reached an excellent level of 48%. The remuneration received from the central banking project, of approximately 22 million euros, was recorded as a significant non-recurring item for the year.
The balance sheet increased by almost one billion during the financial year, exceeding for the first time the 5 billion euros to reach 5.4 billion euros. From January to December, pre-tax profit increased by 121% to 83.3 million euros. Comparable profit before tax also doubled to 53.1 million euros.
Dividend increase for the sixth consecutive year
The ever-increasing profitability allows a growing dividend to the owners. The dividend proposal at the Annual General Meeting reaches a record level, totaling EUR 0.50 per share. In accordance with the Board of Directors’ profit distribution proposal, an effective dividend of EUR 0.30 per share is proposed based on the result of continuing operations for the last financial year, and an additional dividend of EUR 0.20 per share is offered due to significant exceptional items last year.
In the years to come, the use of company capital will become even more efficient with IRB methods. OmaSp has been preparing for the application of the IRB method in capital adequacy calculations for a long time and we filed a request for authorization with the Finnish Financial Supervisory Authority at the beginning of February. It is also important to us that the application of the IRB method improves risk management and places OmaSp in a position comparable to that of reference banks.
Excellent customer and staff experience as the basis for profitable growth
Our operations are based on excellent staff and customer experience, and both components are at record levels as studied. OmaSp has been one of the most profitable and efficient banks in the Nordic countries in recent years, and we also want to cherish it in the future. We follow with great interest the ongoing changes and possible restructuring in the financial sector. In line with our earnings forecast, we expect OmaSp’s profitable growth to remain strong in 2022.
Warm thanks to customers, staff, owners and partners for 2021! »
• Net interest income continued to rise sharply by 15.8% in October-December and by 18.2% throughout the year.
• The residential mortgage loan portfolio has increased by a total of 29.8% over the last 12 months. At the same time, the business loan portfolio increased by 27.4%.
• Deposit inventories have increased by 21.9% over the past 12 months.
• Income and expenses (net) of fees and commissions increased in October-December by 9.1% and by 15.1% for the year as a whole.
• In accordance with the plan, the company finalized the acquisition of the activities of Eurajoen Savings Bank in December. The acquisition increased the company’s balance sheet by around 335 million euros and increased the number of private and corporate customers by around 12,000. The positive impact of the acquisition on the profit of the he business is estimated to be worth approximately €14 million, of which €7.5 million has been recognized in the company’s pre-tax profit for the financial year 2021. The costs related to the acquisition of the business are amounted to approximately 14 million euros. 4.4 million. The costs were mainly recorded in the last quarter of 2021.
• In June, the company announced that it had reached an agreement with Cognizant to terminate the contract for the central banking project. As part of the agreement, Cognizant paid the company financial compensation, which had a positive impact of approximately 22 million euros on the company’s pre-tax profit. Earnings were recorded in the second quarter.
• Total operating income increased by 26.9% in the last quarter and amounted to EUR 39.5 million. During the year, total operating income increased by 41.0% to EUR 156.6 (111.1) million.
• Impairments of financial assets decreased significantly compared to the comparison period and amounted to 1.6 (7.6) million EUR in October-December. For the year as a whole, the impairments of financial assets decreased compared to the previous year and amounted to 7.3 (21.6) million EUR.
• The cost/income ratio for the last quarter increased and stood at 49.9 (41.3)%. The comparable cost/income ratio increased slightly to 47.9 (46.5)%.
• The cost/income ratio for the full year improved and stood at 41.9 (46.6)%. The comparable cost/income ratio also improved and stood at 48.0 (51.2)%.
• For October-December, profit before tax increased significantly compared to the previous year and amounted to 18.0 (10.5) million euros. Also for the full year, the profit before tax increased significantly compared to the previous year and amounted to EUR 83.3 (37.7) million.
• For October-December, the comparable profit before tax increased significantly compared to the comparative period and amounted to 14.4 (6.9) million euros. For the full year, the comparable profit before tax amounted to 53.1 (26.7) million euros.
|The key to the group figures (1,000 euros)||1-12/2021||1-12/2020||∆%||2021 Q4||2020 Q4||Δ%|
|Net interest income||80 130||67,819||18%||21,873||18,890||16%|
|Income and expense from fees and commissions, net||33,686||29,257||15%||9,094||8,332||9%|
|Total operating expenses||-65,294||-51,676||26%||-19,518||-12,758||53%|
|Impairment losses on financial assets, net||-7,294||-21,587||-66%||-1,632||-7,602||-79%|
|Cost/revenue ratio, %||41.9%||46.6%||-ten%||49.9%||41.3%||21%|
|Total balance sheet||5,372,633||4,381,999||23%||5,372,633||4,381,999||23%|
|Equity||401 294||353 493||14%||401 294||353 493||14%|
|Return on assets (ROA) %||1.4%||0.8%||70%||1.1%||0.9%||23%|
|Return on equity (ROE) %||17.6%||9.1%||93%||14.5%||10.4%||39%|
|Earnings per share (EPS), EUR||2.22||1.04||113%||0.48||0.31||55%|
|Common Equity Tier 1 (CET1) ratio %||15.5%||15.9%||-2%||15.5%||15.9%||-2%|
|Comparable profit before tax||53 142||26,729||99%||14,448||6,910||109%|
|Comparable cost/income ratio, %||48.0%||51.2%||-6%||47.9%||46.5%||3%|
|Comparable return on equity (ROE) %||11.2%||6.5%||72%||11.6%||7.0%||66%|
Orlooked for fiscal year 2022:
The company believes that profitable growth will continue to be strong. The Group’s 2022 comparable pre-tax result will increase compared to the previous year.
Proposal of the board of directors for the distribution of profits at the general meeting
The Board of Directors proposes, on the basis of the accounts to be closed for 2021, a dividend of EUR 0.30 taken from the distributable profit of the parent company for each share giving right to the 2021 dividend. In addition, the Board of Directors proposes to pay an additional dividend due to the strong results and significant exceptional items for the financial year 2021. An additional dividend of EUR 0.20 is proposed for each share entitled to a dividend for 2021. For 2021, a total dividend of EUR 0.50 per share would be paid for the 2021 financial year.
The Annual General Meeting is scheduled for Wednesday, March 30, 2022. The Company’s Board of Directors will convene the Annual General Meeting separately at a later date.
Oma Savings Bank Plc
Pasi Sydänlammi, CEO, puh +358 45 657 5506, [email protected]
Sariana Liiri, CFO, puh. +358 40 835 6712, [email protected]
Minna Sillanpää, CCO, tel. +358 50 66592, [email protected]
Nasdaq Helsinki Ltd
OmaSp is a growing Finnish bank and Finland’s largest savings bank by total assets. Approximately 330 professionals provide services nationwide through OmaSp’s 35 branches and digital service channels to more than 150,000 clients. OmaSp focuses primarily on retail banking operations and offers its customers a wide range of banking services both through its own balance sheet and by acting as an intermediary for its partners’ products. Intermediated products include credit insurance, investment and loan products. OmaSp is also engaged in mortgage banking.
The central idea of OmaSp is to provide personalized service and to be local and close to its customers, both in digital and traditional channels. OmaSp strives to provide a high level customer experience through personalized service and easy accessibility. In addition, the development of operations and services is customer-oriented. Staff are engaged and OmaSp seeks to support their career development with cross-functional tasks and continuous development. A substantial part of the staff also holds OmaSp shares.
Publication of OmaSp’s financial statements on December 31, 2021