OMA SAVINGS BANK PLC, STOCK EXCHANGE RELEASE 9 MAY 2019 AT 9.00 A.M. EET, INTERIM REPORT Q1
Oma Savings Bank Plc’s interim report 31 March 2019: Business volumes and profit growing strongly
This release is a summary of Oma Savings Bank’s (OmaSp) 31 March 2019 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:
Excellent start to the year
An excellent customer experience gave our profitable growth a boost in the first quarter of the year 2019. This was evident based on the increase in both the profit and business volumes. Our net interest income grew by 17.3% and fee and commission income (net) grew by 5.1% compared to comparative period. Operating income rose due to the combined impact of non-recurring items of net income on financial assets and liabilities from the sale of the holding in Oy Samlink Ab and dividends. As a result, our profit before taxes grew by as much as EUR 7.2 million, amounting to EUR 11.9 (4.7) million. Our comparable profit grew strongly by 15.3%, totalling EUR 5.2 (4.5) million.
Our deposit portfolio showed excellent growth during the first quarter, which in part contributed to the growth of the loan portfolio. Our loan portfolio grew by some EUR 100 million, totalling EUR 2.6 (2.5) billion at the end of March. Demand for both home mortgages and corporate loans remained strong throughout Q1. Our housing loan portfolio grew during the first quarter by 4.16%. During Q1, some EUR 49.6 million in home mortgages were issued and our housing loan portfolio came to EUR 1.24 (1.19) billion at the end of March. The growth of the corporate loan portfolio was also good at 3.99%. Some EUR 33.5 million in new corporate loans were issued and the corporate loan portfolio came to EUR 874.6 (841.2) billion at the end of March.
In March, we issued a EUR 300 million covered bond, which will improve our ability to meet the demand for and pricing of customers’ home mortgages.
Our balance sheet rose to a record-high level and for the first time we exceeded the EUR 3 billion limit.
Renewal of the banking platform initiated
The planning and negotiation phase for a reform of the banking platform was concluded in January. We are confidently setting out to develop the next-generation banking platform using Temenos banking system technology, which is already in use in Finland. The project has taken off according to plan and is proceeding one step at a time. The roll-out of the new banking platform is scheduled for 2021. For customers, the renewal of the banking platform means new products and services at a faster pace and an improved service experience at branch offices and in mobile and online banking.
Customer experience boosts profitable growth
New branch offices in Greater Helsinki, Oulu and Turku were launched in February 2019 and their operations were fully up and running during the first quarter. Our operations in Finland’s key growth centres reinforces our operating conditions in the future. The Kihniö branch operations were transferred to the full-service branch in Parkano.
Our latest digital innovation, the OmaKonttori app, has received positive feedback from customers. It allows us to bring our banking agents and face-to-face visits to customers’ smartphones all over Finland. This enables us to establish a new customer relationship and customers can choose to begin using bank services entirely remotely. We feel it is important that the customer can select the service channel that suits them best.
January – March 2019
• Net interest income was EUR 13.2 (11.3) million, an increase of 17.3% compared to the previous year’s corresponding period.
• Fee and commission income (net) grew by 5.1%, totaling EUR 6.2 (5.9) million.
• Operating income came to approximately EUR 27.4 (17.5) million.
• The net income on financial assets and liabilities was EUR 6.7 (0.2) million. The most significant non-recurring items were Oy Samlink Ab’s additional dividend and the change in the fair value of Samlink’s shares.
• Operating expenses came to a total of EUR 14.3 (11.3) million. Operating expenses rose due to personnel expenses, expenses resulting from the opening of new branch offices, IT system development costs and the recognition of annual Deposit Guarantee Fund and Financial Stability Authority payments during the first quarter.
• The total amount of impairment losses on financial assets was EUR 1.2 (1.5) million.
• The Group’s profit before taxes was EUR 11.9 (4.7) million.
• The company’s comparable profit before taxes, which has been adjusted for net interest income on financial assets and liabilities, was EUR 5.2 (4.5) million.
| The Group's key figures (1,000 euros) | 1-3/2019 | 1-12/2018 | 1-3/2018 |
| 1) Operating income/loss | 30,061 | 88,092 | 20,139 |
| Net interest income | 13,195 | 49,351 | 11,252 |
| % of operating income/loss | 43.9% | 56.0% | 55.9% |
| Total operating income | 27,392 | 75,958 | 17,462 |
| Total operating expenses | 14,292 | 47,237 | 11,286 |
| 1) Cost/income ratio, % | 52.2% | 62.2% | 64.6% |
| Impairment losses on financial assets, net | -1,205 | -3,746 | -1,501 |
| Profit before taxes | 11,892 | 24,976 | 4,675 |
| % of operating income/loss | 39.6% | 28.4% | 23.2% |
| Profit/loss for the accounting period | 10,789 | 20,322 | 3,492 |
| Balance sheet total | 3,351,058 | 2,914,661 | 2,730,621 |
| Equity | 304,486 | 290,330 | 244,537 |
| 1) Return on assets (ROA) % | 1.4% | 0.7% | 0.5% |
| 1) Return on equity (ROE) % | 14.5% | 7.6% | 5.7% |
| 1) Earnings per share (EPS), euro | 0.36 | 0.78 | 0.14 |
| Average number of shares (excluding own shares)* | 29,585,000 | 25,822,093 | 25,087,200 |
| Number of shares at the end of the year (excluding own shares)* | 29,585,000 | 29,585,000 | 25,087,200 |
| Equity ratio, % | 9.1% | 10.0% | 9.0% |
| Total capital (TC) (as percentage of risk exposure) | 18.3% | 19.3% | 17.6% |
| Common Equity Tier 1 (CET1) (as percentage of risk) | 17.6% | 18.4% | 16.4% |
| Tier 1 (T1) (as percentage of risk exposure) | 17.6% | 18.4% | 16.4% |
| 1) Liquidity coverage ratio (LCR) % | 458.8% | 134.8% | 129.1% |
| Average number of employees | 299 | 288 | 268 |
| Employees at the end of the period | 301 | 293 | 270 |
| Alternative performance measures excluding items affecting comparability: | |||
| 1) Comparable profit before taxes | 5,193 | 26,210 | 4,505 |
| 1) Comparable cost-to-income ratio, % | 69.1% | 61.1% | 65.3% |
| 1) Comparable earnings per share (EPS), euro | 0.14 | 0.82 | 0.13 |
| 1) Comparable return on equity (ROE), % | 5.6% | 8.0% | 5.5% |
* The number of shares in the comparable periods take into account the 50:1 stock split carried out on 9 November 2018.
1) The calculation principles of the key figures and alternative key figures are presented in note G16 of the financial statements. Items linked to the comparability of the key figures and the actual calculation are presented in the income statement.
Outlook for the 2019 accounting period:
The company’s business volumes have grown strongly in Q1 and are predicted to maintain their solid growth during the 2019 accounting period. 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 the opening of new units.
Oma Savings Bank Plc provides earnings guidance and the comparable profit before taxes and the profit before taxes. A verbal description is used to make a comparison with the comparable 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.
Provided that profitable growth continues, the company estimates that the Group’s comparable profit before taxes for 2019 will grow compared to the previous accounting period. At the same time, the profit before taxes for 2019 is estimated to grow compared to the previous accounting period.
Oma Savings Bank Plc
Board of Directors
Additional information:
Pasi Sydänlammi, CEO, tel. +358 45 657 5506, pasi.sydanlammi@omasp.fi
Sarianna Liiri, Chief Financial and Administrative Officer, tel. +358 40 835 6712, sarianna.liiri@omasp.fi
Additional information and interview requests for media:
Minna Sillanpää, CCO, tel. +358 50 66592, minna.sillanpaa@omasp.fi
DISTRIBUTION
Nasdaq Helsinki Ltd
Major media
www.omasp.fi
Oma Savings Bank in short
OmaSp is a growing Finnish bank and the largest savings bank in Finland based on total assets. About 290 professionals provide nationwide services through OmaSp’s 40 branch offices and digital service channels to over 136,000 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 continuous development. A substantial part of the personnel also own shares in OmaSp.
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