OMA SAVINGS BANK PLC, STOCK MARKET RELEASE OCTOBER 31, 2022 AT 8:30 AM EET, Q3 INTERIM REPORT
oma Savings Bank Plc Interim Report 1.1.-30.9.2022: Comparable profit before tax of 18.9 million euros for the third quarter – an increase of 35% compared to the comparison period
This release is a summary of the January to September 2022 interim report of Oma Savings Bank (OmaSp), 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:
“OmaSp’s business development also continued to be excellent during the third quarter. Profitability, which continues to strengthen, remained solid despite the uncertain operating environment. About a thousand new customer relationships are still created every month. In early September, the company issued a positive earnings warning.
Operational efficiency again results in an excellent cost/revenue ratio. The comparable cost/income ratio was 45.3% for the third quarter.
The development of the two main sources of income remained vigorous. In addition to volume growth, as expected, the development of net interest income was accelerated by the expected general increase in interest rates. During the third quarter, net interest income increased by 31% and fee and commission income by 25% compared to the previous year.
During the third quarter, return on equity (ROE%) was 16.1% and comparable return on equity (ROE%) increased to 17.1%.
From January to September, profit before tax amounted to 49.9 million euros. The comparative period figures included a significant non-recurring item of approximately €22 million. The comparable profit before tax amounted to 55.1 million euros, a colossal increase of 42%.
OmaSp well prepared for the uncertainty of the operating environment
OmaSp continued to prepare for the uncertainty in the operating environment and took steps to strengthen capital and liquidity cushions during the third quarter. The bank’s solid financial position and the confidence gained enabled a successful issue of 150 million euros in exceptionally difficult market conditions. A bond issue of 20 million euros was also put in place. Interest rate hedging measures were also put in place during the third quarter.
The quality of OmaSp’s loan portfolio is at a good level and additional provisions have been made for the payment difficulties of individual customers. In the third quarter, impairment losses on financial assets of €1.6 million were recorded, which included an additional provision based on management judgment of €1.0 million.
OmaSp from excellent starting points towards the end of the year
We will continue our investments to ensure our future competitiveness and our investments in the customer experience. Preparations for the opening of the new branch at Iso Omena in Espoo are in the final stages and the branch will be open to customers in November. Also in Tampere, the second full-service branch will open in December 2022.
Liedon Savings Bank’s merger date has been confirmed on February 28, 2023. With the merger, the growing volumes will further improve OmaSp’s profitability and business profitability. This agreement will increase OmaSp’s profits by 15 to 20 million euros over the next few years.
Especially in times of uncertainty, the importance of the bank’s strong financial position is highlighted. Thanks to flexible operating models, OmaSp was able to deliver strong results even in a changing operating environment, and the bank is continuing from strong starting points towards the end of the financial year.
January – September 2022
• Net interest income rose sharply by 27.5% in January-September compared to the same period last year. In addition to volume growth, net interest income increased due to higher market interest rates. In the third quarter, net interest income increased by 31.0%.
• The residential mortgage portfolio increased by a total of 22.3% over the previous 12 months. The business loan portfolio has increased by 42.7% over the past 12 months.
• Deposit inventories have increased by 11.4% over the past 12 months.
• Income and expenses (net) of fees and commissions increased due to volume growth of 26.7% in January-September. In the third quarter, income and expenses (net) of fees and commissions increased by 25.5%.
• Impairments of financial assets have decreased compared to the previous year and the impairments amount to 0.4 (5.7) million EUR. During the third quarter, impairment of financial assets amounted to 1.6 (2.1) million euros.
• In January-September, pre-tax profit decreased due to a single significant positive item recorded in the comparative period 2021 (EUR 22.3 million). Profit before tax amounted to EUR 49.9 (65.3) million.
• For January-September, the comparable profit before tax increased significantly compared to the comparative period and amounted to 55.1 (38.7) million euros.
• For the third quarter, profit before tax increased compared to the comparative period and amounted to 17.8 (15.3) million euros. For the third quarter, the comparable profit before tax increased and amounted to 18.9 (14.0) million euros.
• For January-September, the cost/income ratio weakened due to exceptional items during the comparative period and stood at 51.9% (39.2%). The comparable cost/income ratio was 49.5% (47.8%).
• For the third quarter, the cost/income ratio was 46.7% (42.6%). The comparable cost/income ratio was 45.3% (44.3%).
• Comparable return on equity (ROE) improved to 15.7% (11.1%) for the January-September period. For the third quarter, the comparable return on equity (ROE) was 17.1% (11.6)%.
|
Group key figures (1,000 euros) |
1-9/2022 |
1-9/2021 |
∆% |
2022 Q3 |
2021 Q3 |
∆% |
|
Net interest income |
74,296 |
58,257 |
28% |
26,981 |
20,588 |
31% |
|
Income and expense from fees and commissions, net |
31 154 |
24,592 |
27% |
10,173 |
8,107 |
25% |
|
Total operating expenses |
-54,353 |
-45,776 |
19% |
-16,930 |
-12,942 |
31% |
|
Impairment losses on financial assets, net |
-431 |
-5,661 |
-92% |
-1,557 |
-2,058 |
-24% |
|
pre-tax profit |
49,941 |
65,304 |
-24% |
17,772 |
15,348 |
16% |
|
Cost/revenue ratio, % |
51.9% |
39.2% |
32% |
46.7% |
42.6% |
9% |
|
Total balance sheet |
5,849,001 |
4,902,204 |
19% |
5,849,001 |
4,902,204 |
19% |
|
Equity |
350 730 |
384,963 |
-9% |
350 730 |
384,963 |
-9% |
|
Return on assets (ROA) % |
1.0% |
1.5% |
-36% |
1.0% |
1.0% |
-3% |
|
Return on equity (ROE) % |
14.2% |
18.8% |
-24% |
16.1% |
12.7% |
26% |
|
Earnings per share (EPS), EUR |
1.34 |
1.76 |
-24% |
0.47 |
0.41 |
15% |
|
Common Equity Tier 1 (CET1) ratio % |
13.0% |
16.5% |
-21% |
13.0% |
16.5% |
-21% |
|
Comparable profit before tax |
55,092 |
38,695 |
42% |
18,921 |
14,015 |
35% |
|
Comparable cost/income ratio, % |
49.5% |
47.8% |
3% |
45.3% |
44.3% |
2% |
|
Comparable return on equity (ROE) % |
15.7% |
11.1% |
41% |
17.1% |
11.6% |
47% |
Outlook for the 2022 accounting period (updated 6 September 2022)
The Company believes that profitable growth will continue to be strong. The Group’s comparable pre-tax income in 2022 will increase significantly compared to the previous year.
Oma Savings Bank Plc
board of directors
Further information:
Pasi Sydänlammi, CEO, tel. +358 45 657 5506, pasi.sydanlammi@omasp.fi
Sariana Liiri, financial director, tel. +358 40 835 6712, sarianna.liiri@omasp.fi
Minna Sillanpää, CCO, tel. +358 50 66592, minna.sillanpaa@omasp.fi
DISTRIBUTION
Nasdaq Helsinki Ltd
Main media
www.omasp.fi
OmaSp coming soon
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 160,000 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 owns OmaSp shares.
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