Annual Report • Mar 5, 2024
Annual Report
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| Effective corporate governance and transparent organizational model |
124 |
|---|---|
| Group structure | 125 |
| Governance structure | 126 |
| General Meeting | 127 |
| Board of Directors | 128 |
| Board of Directors' Committees |
134 |
| Shareholders' Nomination Committee |
135 |
| CEO and his/her responsibilities |
137 |
| The Management Team | 138 |
| Main features of the internal control and risk management systems connected with the financial reporting process |
142 |
| Financial reporting | 143 |
| Functions independent of business operations |
144 |
| Related party information | 146 |
| Auditors | 146 |
| Report of Board of Directors | 150 |
|---|---|
| Strategy and financial goals | 151 |
| The Company's operation | 152 |
| Operating environment | 156 |
| Result 1–12/2023 | 160 |
| Balance sheet | 165 |
| Deposit Guarantee Fund and Investors' Compensation Fund 168 |
|
| The Group's capital adequacy and risk management |
169 |
| Resolutions of the Annual General Meeting |
178 |
| Administration and personnel 182 | |
| Corporate social responsibility and sustainability |
184 |
| Significant events after the period |
185 |
| Outlook for 2024 | 186 |
| The Group's Financial Statements 190 | |
| Oma Savings Bank Plc Parent Company's Financial Statements 262 |
|
| Signatures | 300 |
| Audit report | 302 |
| Sustainability Report 2023 | 33 |
|---|---|
| Starting points for sustainability 42 | |
| Sustainability roadmap | 52 |
| We are local and close to people 60 | |
| We promote collective well-being |
70 |
| We contribute to sustainable development |
78 |
| Sustainability in figures | 90 |
| Carbon footprint report 2023 | 100 |
| What is a carbon footprint? | 101 |
| Baseline data, assumptions and limitations |
104 |
| Total carbon footprint | 108 |
| Carbon footprint by emission source |
114 |
| Carbon footprint comparison 120 |
| CEO Pasi Sydänlammi | 6 |
|---|---|
| Investor information | 10 |
| Key figures | 12 |
| A profitably growing Finnish bank |
16 |
| At the heart of the strategy | 18 |
| Efficient sales and service network |
20 |
| Comprehensive banking services |
22 |
| From a small local bank into the main list company of the Nasdaq Helsinki Stock Exchange |
24 |
| OmaSp's growth story | 26 |
| Highlights of the year 2023 | 28 |
The development of net interest income continued throughout the year and the growth was 88% compared to the previous year. The upward trend in fee and commission income and expenses also continued and full-year commission and fee and commission income and expenses increased by 20% compared to the previous year. The development of customer numbers remained at a good level. With the acquisition of Liedon Savings Bank's a total of EUR 7.8 million in ECL in profit or loss for the financial year.
OmaSp's business development continued on the path of strong growth in the financial year 2023. Profit development was boosted by the transaction carried out in the early part of the year and the rise in market interest rates. The unique combination of growth and profitability is reflected in a strong accumulation of equity, which enables owners to achieve record profit distribution as well as investments to enable future success. Year 2023 Comparable profit before taxes +89%
For the year 2023, profit before taxes was EUR 138 million. The full-year comparable profit before taxes increased by 89% compared to the comparison period and was EUR 143.6 million. The balance sheet total was EUR 7.6 billion and grew by over EUR 1.7 billion during the financial year.
business, we received about 50,000 new customer relationships and in addition to this, about 1,000 new customer relationships were organically created every month.
Strong business development is reflected in a significant increase in equity. The equity exceeds 500 million for the first time for the full year and was approximately EUR 541 million at the end of the year. The full-year comparable return on equity (ROE%) reached a record level of 25.3%. During the financial year, the comparable cost/income ratio improved further and was 35.1% including authority fees.
The quality of the credit portfolio has remained at the expected level despite the uncertain economic situation. OmaSp continued to prepare for the weakening cyclical situation and additional allowances based on the management's judgement of EUR 8.3 million are for use. We recognised
Pasi Sydänlammi, CEO
Year 2023 Comparable ROE
25.3% Year 2023 Comparable cost/ income ratio
35.1%
Pasi Sydänlammi CEO
OmaSp's constantly strengthening ability to generate profit enables a growing dividend for the owners for the seventh year in a row. A dividend of EUR 1.00 per share is proposed for the spring Annual General Meeting, of which the actual dividend is EUR 0.67 and an additional dividend of EUR 0.33 per share due to the record result and exceptionally strong net interest income.
Profitable growth is expected to continue in the financial year 2024. In addition to organic growth, we will continue to strengthen our market position with the acquisition of Handelsbanken's SME business in Finland in the autumn. At the same time, our operations are expanding in the Helsinki metropolitan area to Vantaa and the economic areas of Kuopio and Vaasa. OmaSp is once again starting the financial year from an excellent starting point.
Warm thanks to all customers, personnel, owners and partners for 2023!
Capital and Risk Management Report 2023
Oma Savings Bank Plc's internal control, risk management and risks are described in more detail in the Capital and Risk Management Report 2023, published as a separate report. The report is available on the company's website omasp.fi/en/investors
The shares of Oma Savings Bank Plc are maintained by Euroclear Finland Oy. Issues relating to share information are managed by Oma Savings Bank Plc Hanna Sirkiä, Chief Legal Officer, phone +358 20 758 2939.
Oma Savings Bank Plc's Annual General Meeting will be held on Tuesday 26 March 2024 at 12 pm Finnish time at Scandic Helsinki Hub, Annankatu 18, Helsinki.
Shareholder, who is registered in the company's register of shareholders maintained by Euroclear Finland Ltd as at 14 March 2024, has the right to participate in the Annual General Meeting. A shareholder, whose shares are registered in his/her personal Finnish bookentry account, is registered in the shareholder's register of the company.
Shareholders whose shares are registered in their personal Finnish book-entry account are registered in the company's register of shareholders and who wish to participate in the Annual General Meeting must register their intention to attend by 4.00 pm on 21 March 2024, at the latest.
The AGM notice including all resolutions of the AGM, is available on Oma Savings Bank Plc's website at omasp.fi/en/investors/ management-and-corporate-governance/ annual-general-meeting/annual-generalmeeting-2024
* Personnel survey 12/2023. ** Parasta palvelua 12/2023 -customer survey.
| Key figures | 3.49 Earnings per share (EPS) Accounting period (EUR) 1–12/2023 |
|---|---|
| 197 | 25.3% |
| Net interest | Comparable |
| income | ROE |
| Accounting period | Accounting period |
| (EUR mill.) | • • • |
| 1–12/2023 | 1–12/2023 |
| 138 | 445 |
| Profit before | Number of |
| taxes | employees |
| Accounting period | Average, accounting |
| (EUR mill.) | • • • |
| 1–12/2023 | period 1–12/2023 |
| 144 | 4.5/5 |
| Comparable profit | Employee |
| before taxes | satisfaction |
| Accounting period | Satisfaction in the company |
| (EUR mill.) | • • • |
| 1–12/2023 | as a whole. * |
| 35.1% Comparable cost/ income ratio Accounting period • • • 1–12/2023 |
>200000 Customers Private customers 85%, • • • corporate customers 15% |
| 7,642.9 | 4.3/5 |
| Balance | Customer |
| sheet total | satisfaction |
| (EUR mill.) | • • • |
| Accounting period | Satisfaction in the |
| 1–12/2023 | company as a whole. ** |
| Maija Koivunen and Leo Schroderus, Turku | ||
|---|---|---|
Number of shares outstanding changed following the listing (pcs) in 2019 29,585,000 | 2020 29,585,000 | 2021 29,773,517 | 2022 29,990,687 | 2023 31,546,596
Cost/income ratio less than 45%
Common equity tier 1 capital (CET1) at least 2%.
Comparable EPS
EPS
Return on equity (ROE)%
Balance sheet total, EUR mill.
Loans and advances to the public and public sector entities
We grow profitably by providing comprehensive banking services and the best customer service in the industry with cost-effectiveness and managing the risks.
Local and close. Highest customer satisfaction and referral rate in the industry.
Credit policy, financial soundness, solvency and systematic risk management processes.
Excellent, flexible customer service and efficiency in all operations..
Our goal is to offer the best local banking service local and close to you. Our goal is a high level of service experience and the highest customer satisfaction within the industry both in digital service channels and bank branches on site.
Online bank
Extensive opening hours in branches
Loan decisions locally
OmaMobiili mobile bank & OmaVara
Chat
Cash service every weekday
Customer visits
Customer service,
call center
Google Pay & Apple Pay
Online conferencing service
OmaPostilaatikko mailbox
Digital services with the customer everywhere
45
OmaSp branches
Branches in Vantaa, Vaasa and Kuopio to be opened in 2024
At the heart of the service are daily banking services and lending designed for private and corporate customers. We also offer financing, savings, investment services, legal and other advisory services.
Accounts, payment cards, cashier and payment services, and comprehensive digital services.
Corporate accounts, payment, invoice and payment transaction services, money services, corporate netbank and other digital trading services.
A broad selection of loans from home loans to consumer credits and payment cards with credit facilities. Guarantee solutions also in collaboration with partners.
Extensive financial services for financing business and investments, bank guarantees as well as commercial guarantee products from the cooperation network.
An extensive range of savings products from savings accounts to ASP accounts and time deposits, share basket-linked deposits and various types of insurance savings solutions. Funds and asset management together with Sp-Fund Management Company and Sp-Life Insurance.
An extensive range of savings products from savings accounts to time deposits, share basket-linked deposits and various types of insurance savings solutions. Group pension insurances, capitalization agreements and asset management capitalization in cooperation with Sp-Life Insurance.
Mortgages and consumer credit, together with Sp-Life Insurance. To reduce the company's personnel risks.
Inheritance and family-related legal matters. For example establishing a company, taxation and generational handovers.
Loans, financing and lending
Saving, investments and asset management
Legal advisory services
Services for private
customers
On 27 November 2019, Nasdaq invited OmaSp to Times Square in New York for a bell-ringing ceremony to celebrate its first year on the Helsinki Stock Exchange and its 10th anniversary.
Eurajoen Savings Bank merged with OmaSp.
A new branch was opened in Espoo and another full-service branch in Lielahti, Tampere.
Liedon Savings Bank merged with OmaSp. OmaSp announced that it will acquire Handelsbanken's SME business in Finland in autumn 2024 and expand OmaSp's operations to Vantaa, Vaasa and Kuopio.
The history of OmaSp begins in 1875, when Lappeenrannan Savings Bank opened its doors for the first time on 13th February in the premises of the town hall of Lappeenranta.
The first steps in OmaSp's unique story were taken when Töysän Savings Bank started planning its first bank merger in response to the growing regulation of the banking sector and the transformation of the industry. Kuortaneen Savings Bank was found as a partner in the same region. In 2008, Töysän and Kuortaneen Savings Banks agreed to merge. OmaSp, as we know it today, was born in 2009 when banks handed over their business operations to Oma Savings Bank Plc and operations continued under the name Oma Savings Bank.
Kantasäästöpankki, South-Karelian Savings Bank and Suodenniemen Savings Bank joined OmaSp, making it Finland's largest savings bank.
The business operations of Joroisten Osuuspankki and Pyhäselän Paikallisosuuspankki were transferred to OmaSp.
OmaSp opened branches in Helsinki, Oulu and Turku.
OmaSp's expansion through mergers
OmaSp acquired S-Pankki's SME, agriculture and forestry business, started mortgage banking operations and opened new branches in Lahti and Jyväskylä.
Parkanon Savings Bank merged with OmaSp.
OmaSp was listed on the main list of Nasdaq Helsinki 30 November 2018.
Photographer: Jarno Kylmänen/Glad Media
OmaSp is the main partner in the competition of the National New Entrepreneur. The national New Entrepreneur of the Year 2023 was Kimmo Tossavainen, CEO of KX-Treeshears from Äänekoski.
OmaSp was the main partner in the most significant business event of the year, Nordic Business Forum at the Helsinki Exhibition and Convention Centre in September.
Finland's largest entrepreneur event, the National Entrepreneur Days, was held in Pori in October. OmaSp was the main partner of the event.
The joint Financial Seminar of OmaSp and Lieto's Savings Bank Foundation attracted an audience of several hundred people to hear about current and future entrepreneurship and the opportunities offered by technology. The event was held in Logomo, Turku in March. The event was hosted by news anchor Keijo Leppänen.
In August, the production of bank cards switched to 100% recycled plastic as part of OmaSp's sustainability goals. Safety, longevity, versatility and accessibility have been taken into account in the manufacture. A circular notch on the card makes it easier to identify the card among other cards and enter it into the payment terminal in the correct
direction.
Photographer: Esko Keski-Oja Photographer: Heikki Räisänen/Raeven Visual
Photographer: Veikka Hännikäinen/Rulla Media
The acquisition of Liedon Savings Bank's banking business was completed at the turn of February and March, and OmaSp's service network expanded significantly in the Turku economic area. Lieto's Savings Bank Foundation, established in connection with the merger, continues the long history of Liedon Savings Bank. In the photo left: Pasi
Sydänlammi, CEO of OmaSp, and Jouni Niuro, CEO
of the Lieto's Savings Bank Foundation.
As a result of the expansion of the service network, OmaSp's customer premises in Southwest Finland and elsewhere in Finland were renovated to correspond to the bank's unique service model. The renewals took into account the comfort of customers and staff. Sustainability and OmaSp's brand image are emphasised in the choices.
OmaSp's renewed website was published in September 2023. The renewed website offers more comprehensive content, taking into account different target groups.
Sustainability is one of the basic pillars of Oma Savings Bank Plc. It is at the heart of the business and an increasingly important part of the future operations. We have reported on our sustainability since 2019. The sustainability program and the sustainability report have been prepared in accordance with the GRI standards since 2022. With the current reporting, our goal is to deepen and promote our sustainability efforts and proactively meet evertightening requirements as well as to prepare for the reporting requirements of the future CSRD regulation.
Our sustainability efforts are based on our company's values and Code of Conduct, stakeholder expectations and megatrends that affect our operations. Based on these, we have determined three key sustainability themes: we are local and close to people, we promote collective well-being and we contribute to sustainable development.
This report is a synthesis of our sustainability efforts in 2023. In the report, we examine the impacts of our operations on the environment, people and society, following the principles of due diligence and materiality.
OmaSp is a Finnish bank, which has grown from a small local bank into the main list company of the Nasdaq Helsinki Oy stock exchange during the last decade. OmaSp's history in banking goes back to 1875 and today OmaSp is the fastest growing bank in the Nordic countries and Finland's most profitable bank. We are strongly committed to our customers, personnel and operating environment, contributing to building economically, socially and environmentally sustainable society, providing essential basic services and opportunities for citizens, companies and communities. By providing new jobs outside urban centres and financing local personal and business customers we actively promote and develop local and regional vitality.
OmaSp has reported on sustainability since 2019 and monitored performance against the targets set for the identified sustainability themes through annual sustainability report. Since 2019, OmaSp has supported all of the 17 UN Sustainable Development Goals. Five of these goals the ones with the most material impact – have been incorporated into our daily management, strategy and operations.
is entrepreneurial minded and motivated personnel. The fact that half of the personnel own shares in the bank also tells a lot about OmaSp's corporate culture. We are confident that employee satisfaction and well-being at work will be positively reflected in the customer experience.
Our sustainability aspects can be divided into three themes: we are local and close to people, we promote collective well-being and we contribute to sustainable development. We have identified ten sustainable aspects that are material to us, and which form the basis for our sustainability efforts. We have concluded that we must pay particular attention to the following three:
In 2020, the content of our report expanded to cover the assessment of OmaSp's environmental impacts through the carbon footprint in accordance with the GHG Protocol standard. Since 2022, sustainable program and report have been prepared in accordance with the principles of the GRI standards. The reporting of sustainability work has been deepened and advanced to proactively meet ever-tightening requirements of sustainability. The GRI reporting has served as a good preparation for future reporting requirement of the CSRD regulation.
OmaSp's sustainability program is based on values, Code of Conduct, stakeholder expectations and megatrends of the operating environment. Sustainability is also complying with the industry's common practices, legislation and acts as well as the principles of sustainable development.
At the heart of our strategy is a satisfied customer and our goal is to reach the highest customer satisfaction in the industry by being local and close in everyday life of our private and business customers. A key to success
During 2023, we have supported a local community spirit and well-being at our branch locations and the surrounding areas by organising events and participating in local events.
A significant part of OmaSp's profit is once again put back into communities near our customers and for purposes of general interest through the OmaSp foundations and co-operatives that support well-being, economy and vitality of their catchment areas by distributing grants and subsidies. We have continued to promote the well-being and financial skills of children and young people by participating in various programs that teach financial skills, such as Oma Onni online learning environment for developing young people's financial skills and NYT Yrityskylä, where primary school students learn about the working life, the economy and the society.
During 2023, OmaSp has implemented various measures to strengthen its sustainability work, such as
During 2023, OmaSp's sustainability work has progressed with determined steps and the bank has estimated the sustainability factors that are essential for the business in accordance with the conditions specified by the double materiality of CSRD. OmaSp actively strives to move towards sustainability reporting that meets the requirements of the CSRD, and based on the results, we can target plans and actions to the most impactful targets in the future. Data and figures on impacts on sustainability factors will be collected more extensively already during 2024.
Key figures and sustainability highlights
Highlights of the year 2023
Service network expanded in the Southwest Finland. In addition, we have developed our digital services.
Moved to a 100 percent recyclable plastics in manufacturing bank cards.
Preparation for the reporting requirements of the future CSRD regulation was launched. An assessment was initiated to examine sustainability business-relevant factors under double materiality conditions.
The organisation structure was streamlined and simplified. Simultaneously, preparations started for the transaction of Svenska Handelsbanken's SME operations in Finland. The new operating model was introduced on 1 December 2023.
We are Finland's largest independent savings bank, serving our customers in 45 branches and via comprehensive digital channels throughout Finland. Our operations focus on retail banking, and we have over 200,000 customers.
At the heart of our strategy is a satisfied customer, who we aim to reach through a first-rate service experience, sustainable operations and customer orientation, not to mention with our enterprising and motivated personnel. Part of our profit is put back into local communities through our owner foundations and co-operatives, which annually distribute grants and subsidies for non-profit purposes.
Our operations are guided by our values: customer orientation, co-operation, reliability, expertise and results. Our Code of Conduct is based on these values, and they describe the sustainability and ethical foundation of our operations in compliance with regulations and our values.
We follow good governance
We comply insider and trading rules
We create a successful working community together
Approx. 500 employees We take care of the customer's interest We are committed to confidentiality and take care of privacy protection We communicate openly 45 branches throughout Finland Over 200,000 customers
We avoid conflict of interest situations and identify them in advance
We do not accept or give bribes
We also demand accountability from our stakeholders
Current branches
Branches in Vantaa, Vaasa and Kuopio to be opened in 2024
In the financial sector, sustainability is more than what is required by laws and regulations. It is about anticipating global change drivers, meeting stakeholder expectations and creating new ways of operating in response to them. The idea is to bear responsibility for economic and social stability, as well as for the climate and the environment.
The transformation of the labour market means that working life is in a constant state of change. In working life, workers of different ages and different ways of working must be taken into account. As remote and hybrid work increases, it is possible to rethink the organisation and decentralisation of work. Problems with matching workers with jobs increase when there is no skilled labour available for the jobs on offer. The importance of personal competence development is growing, not to mention the importance of knowing how to stand out as an employer.
The financial sector plays a central role in safeguarding well-being in a demographic shift, as general prosperity and the elderly population grow, and urbanisation continues. As the elderly population grows and users age, opportunities for personal service must be ensured. It will be increasingly important to offer services outside urban centres, which also enhances the vitality of growth centres.
Companies are actively looking for ways to increase the positive impacts of their operations, not just to minimise the negative impacts. International supervision and regulation are increasing, and the sector is expected to react quickly, adapt and display international service knowhow. As economic thinking evolves and environmental awareness increases, new economic metrics, such as ecosystem accounting and genuine progress indicators, are met with growing interest.
Companies must put more and more effort into responding to climate change and the resulting biodiversity loss. The climate impacts of operations need to be assessed throughout the supply chain and they must also be taken into account in financial solutions and products. Global warming brings business risks and opportunities, to which leaders respond proactively.
Unexpected situations, such as pandemics, political crises and war, affect the operations and the competitive arena. Active monitoring of the political and economic situation and forecasting of situations and risks rise to the forefront. The financial sector must reinforce solvency, the financial structure and liquidity in order to balance the economy.
Operating models are evolving thanks to rapid advances in technology. Automation and decentralisation of operations are all the rage. With advances in technology, the amount of data also increases, which, in addition to technical capabilities, entails a growing need for technological understanding. It is also important to remember that our digitalising world is more vulnerable than ever.
We have identified and anticipated how tightening regulation and other global change drivers will shape society and, consequently, our operations in the future. The following six global megatrends have a significant impact on our operations. The impacts and opportunities created by these megatrends form the basis for our operations, including our sustainability efforts.
Goal 3: Ensure healthy lives and promote well-being for all at all ages. We promote the health and well-being of our customers by ensuring the availability of banking and financial services in an economically sustainable way. In addition to personnel's physical well-being, we also strive to promote their mental health.
Goal 4: Guarantee everyone open, equal and quality education, as well as life-long learning opportunities. We support the career development of our employees through continuous competence development and training. In addition, we promote the well-being and financial literacy of children and adolescents through our involvement in various programmes that teach financial literacy.
Goal 8: Contribute to sustainable economic growth, full and productive employment and decent work for everyone. We contribute to sustainable economic growth and productive employment by employing people throughout Finland. We offer training and summer jobs, and we participate in, e.g., the Responsible Summer Job campaign.
Goal 9: Build resilient infrastructure, promote sustainable industrialisation and foster innovation. We take part in building resilient infrastructure and in promoting sustainable industry and innovation by operating as a partner to various entrepreneurs. We improve the position of small companies as well as their opportunities on the market.
Goal 17: Revitalise the global partnership for sustainable development. We take part in reinforcing the implementation of sustainable development by working in co-operation with various actors to achieve a more sustainable Finland. We work with, e.g., Economy and Youth TAT on the Yrityskylä programme, and with the Sedu vocational education and training organisation on Oma Onni.
In 2015, UN member countries committed to the Sustainable Development Goals (SDG) programme and goals, which set the agenda for sustainable development for 2016–2023. We are committed to contributing to all these goals and have identified five goals that are the most material to us and which we can promote through our operations.
We know that when it comes to responsible and sustainable operations, taking stakeholders into account brings a considerable competitive advantage. Open dialogue with our stakeholders is thus important to us. Well-functioning stakeholder co-operation increases transparency and the common understanding of our operations and how we develop them. Consequently, it is one of the basic pillars of our sustainability efforts.
Our six key stakeholders are customers, personnel, authorities, co-operation partners and media, and owners and investors. We communicate with these stakeholders on a daily basis and develop our operations based on their insights and wishes.
We work closely with the following associations and organisations:
• NYT Yrityskylä • The Federation of Finnish Enterprises • The Finnish Enterprise Agencies
We engage in active dialogue with various authorities. The authorities expect us to comply with the legislation and requirements and to react to any changes. Due to tightening requirements, the importance of sustainability reporting is also growing.
Our owners and investors expect our operations to provide good shareholder value and to generate a sufficient return on investments. They also place importance on open and active dialogue, clear communication and end-to-end sustainability. In recent times, owners' expectations of sustainability have tightened and the importance of sustainable financial and investment products is growing. Approximately 75% of Oma Savings Bank's shares belong to non-profit organisations. The largest individual owner is South Karelia's Savings Bank Foundation, with a roughly 26% stake. In 2018, we were listed on the Nasdaq Helsinki Oy stock exchange The bank now has more than 10,000 shareholders.
We employ approx. 500 experts in different parts of Finland. Our personnel expect a stable and attractive workplace where they enjoy working. Our employees are highly enterprising people. Opportunities for personal development and to influence as well as an appreciation of expertise are considered important. Our employees also expect fair and equal treatment.
At the heart of our service offering are daily banking services intended for private and corporate customers. Customers expect from us good, continuous and personal service in all our service channels, as well as competitive products. Diverse service channels, good accessibility and confidentiality are considered important.
We collaborate with different partners, subcontractors and the media. Importance is placed on a safe partnership with shared values. The media, for its part, expects open communication and active dialogue.
As part of updating our sustainability programme, we have identified the sustainability aspects that are the most significant for us in the short term. These aspects have been identified based on the global change drivers that shape society and thus our operations and tightening regulation and evolving stakeholder expectations.
We have identified ten material sustainability aspects which form the basis for our sustainability efforts. These sustainability aspects have been identified considering our entire value chain, following the principle of due diligence. We have also assessed the
impacts of our operations under the principle of materiality; in addition to the negative footprint of our operations, we have identified our handprint, i.e. our positive impact on people, the environment and society.
The continuous development and assessment of these aspects are at the core of our sustainability efforts. All of the identified aspects are important for our work. However, we have further identified the specific aspects we will need to pay particular attention to when it comes to developing our operations going forward.
We want to be local and close to people. Personal customer service is our key to customer satisfaction. We regularly monitor customer satisfaction and listen to our customers. We also want to continuously support all aspects of our personnel's well-being and enable the development of our personnel's competence.
We have an important task to support customers in the management and development of their personal finances, in addition to which we support the well-being of local communities by employing and financing local players. We ascertain good governance and ethical business and also ensure the sustainability of our partners.
We have the opportunity to positively impact the challenges arising from climate change by providing sustainable financial and investment solutions to our customers. Assessing the climate-related risks of investment activities and portfolios is important. We also regularly calculate the emissions from our own operations, with the goal of reaching carbon neutrality.
We are local and close to people
We promote collective well-being
We contribute to sustainable development
To bring more clarity to our sustainability efforts, we have divided the main sustainability aspects into three themes that form the essence of our sustainability efforts:
we are local and close to people,
we promote collective well-being and
we contribute to sustainable development.
We have prepared a roadmap for these sustainability themes, outlining the goals of our sustainability efforts for the coming years. We monitor the implementation of the roadmap annually through the sustainability report.
Highlights of our sustainability goals Goal: customer satisfied with the service Goal: reach carbon neutrality in our own operations Goal: support the well-being of local communities Goal: offer sustainable financial and investment solutions Goal: maintain personnel's well-being and competence Goal: identify climaterelated risks of investment activities and portfolios • Annual overall score in customer survey 4.3/5 • Accessibility 4.3/5 • Satisfaction with the customer's own contact person 4.7/5 • Highlighting sustainability aspects in all new product descriptions • Process and system changes to create a green aspect • Roadmap for a green framework in fundraising • Green-based market financing and financing solutions • Personnel satisfaction on a par with the previous years • Encouraging personnel to seek out training • Developing sustainability competence • Current situation analysis of framework for collecting sustainability data • Reporting and communication on climate impacts of investments • Scenario analysis for climate change risks of investments and financing • Measuring the carbon footprint annually • Creating a carbon neutrality roadmap • Committing to the Paris Agreement • Well-functioning services and sharing of information for entrepreneurs • Collaboration with foundations and co-operatives
Regular collaboration to develop the financial literacy of children and adolescents
Partner selection criteria and process for ESG verification
The operational management of sustainability matters in part of our daily business. Our sustainability activities and their management are guided by the sustainability programme for 2023-2025, which was updated in 2023.
The accompanying sustainability governance model lays down the structures and obligations in managing our sustainability efforts. Sustainability matters are addressed regularly throughout the organisation.
A more detailed description of OmaSp's corporate governance and key management practices can be found www.omasp.fi/en/investors/managementand-corporate-governance
The sustainability management practices are based on, in addition to OmaSp's strategy, the UN Sustainable Development Goals and supplementing internal guidelines and commitments.
The Board of Directors monitors sustainability management and performance, and risk management
The Chief Communications Officer prepares and guides sustainability reporting
The sustainability working group coordinates and develops sustainability efforts
Personnel are responsible for sustainability efforts in practice and help in identifying risks
The sustainability roadmap will be communicated and put into practice through multiple channels reaching out to existing and potential customers, employees and the various stakeholders. OmaSp's website was revamped in 2023, and with the reform, sustainability can be seen more clearly in the contents for different target groups.
| Aspect | Definitions and boundaries | Key guiding principles and policies | |
|---|---|---|---|
| We are local and close to people | People-oriented customer service Personnel's well-being Developing personnel's competence |
We monitor customer satisfaction based on a survey We monitor personnel's job satisfaction, sick leave and accidents We monitor personnel's training hours, degrees and development conversations |
• Sustainability programme and related goals • Principles of good business conduct • Personnel policy • Work community development plan • Equality and equal opportunity plan • Occupational health and safety programme • Occupational healthcare action plan • Reporting of breaches • Early support model |
| Supporting people in managing and developing their personal finances Supporting the well-being of local communities |
We monitor in the customer satisfaction survey whether customers have been presented with opportunities for prospering and whether their future plans have been discussed |
• Sustainability programme and related goals • Principles of good business conduct • Conflict management principles • Reporting of breaches • Insider register |
|
| We promote collective well-being | Good governance and ethical business | We monitor the local events organised by our branches |
• Trading guidelines for personnel • Compliance function's operating principles and |
| Sustainability of partners | We monitor the implementation of the Code of Conduct and cases of misconduct |
• annual plan • annual plan |
|
| We monitor our partners' sustainability performance |
|||
| We monitor customers' sustainability preferences in investment products. |
|||
| We respond to the challenges arising from climate change |
Sustainable financial and investment solutions Climate-related risks of investment activities and portfolios |
We monitor that the bank's own investment decisions are in line with the bank's other sustainable development goals |
• Credit policy • Sustainability programme and related goals • Principles for responsible investment |
| Emissions from and carbon neutrality of own operations | We monitor the carbon dioxide emissions from our own operations and measures to reduce emissions |
• UN Sustainable Development Goals |
We achieve the highest rating in customer satisfaction in the sector
We implement annual work well-being plans and related targets
We keep track of the annual hours and days of training
Utilising the potential of AI in day-to-day operations
We are present in the day-to-day lives of our customers in our 45 branches around Finland, in addition to which we serve our customers via our digital channels – at any time and anywhere in the world. Our broad network of branches and comprehensive digital services ensure that services are conveniently and personally accessible in the form that suits the customer.
Each one of our branches is the bank's flagship in their area. In recent years, we have strengthened our position in key growth centres in accordance with our strategy. Thanks to our broad network of branches, we know the local market and, in addition to this, we have a strong confidence and knowledge of our customer base.
To ensure that our customer service is flexibly available, we also continuously develop our digital channels. In addition to online banking, we offer OmaMobiili, OmaVahvistus, OmaPostilaatikko and enable digital buying and selling of homes and web conferencing. The objective of these services is to ensure that our customers can take care of banking matters together with their dedicated expert, regardless of where they are, by using a smartphone, tablet or computer.
Our goal is for our customers to be satisfied with our services:
We offer retail banking services to households, housing companies, SMEs and agricultural and forestry entrepreneurs. We offer each customer a dedicated expert and we also serve our customers in the evenings on weekdays and on Saturdays. The same dedicated expert can serve a customer in their private banking needs and their company's financial matters.
Continuously improving the customer experience is a matter of the heart for us. Our goal every year is to achieve the highest rating in both customer satisfaction and customer service in the sector. According to the Parasta Palvelua (i.e. Best Service) survey conducted at the end of 2023, the results largely followed the previous excellent results and customer satisfaction has remained very high. The customers also experience, that it is easy to do business in the bank. Over 11,000 voluntary customers participated in the survey.
4.6 on a scale of 1-5
Private customers' satisfaction with their own contact person
Through national collaboration with the Finnish Enterprise Agencies, we support early-stage entrepreneurs. We also cooperate with the Federation of Finnish Enterprises. Our objective is long-term goal-driven collaboration to guarantee
Finnish SMEs opportunities and tools for financial success and for promoting their wellbeing. Through the collaboration, the members of the Federation of Finnish Enterprises enjoy benefits concerning OmaSp's services.
In the beginning of March, we completed the largest-ever corporate restructuring with Liedon Savings Bank. With the business arrangement, our service network and market position strengthened significantly in the Turku economic area and in the Southwest Finland through expansion of nine branches. We focus on even better accessibility and expert service throughout Finland.
In addition to the expanded service network, we have comprehensively developed our digital services. We developed, among other things, a document signing process. By this, 82% of loans were signed digitally and for corporate customers, balance certificate as self-service is enabled. In early fall, we renewed the omasp.fi website. With the reform, the content diversified, and it now notes the needs of various target groups. The renewed webpages also takes especially mobile usage into account. Accessibility is a constant consideration in our development work as well.
On 1 December 2023, we renewed our operating model; the organisation structure was straightened out and simplified. At the same time, we wanted to prepare for the transaction of Svenska Handelsbanken AB's SME enterprise business in autumn 2024. We strengthened and we will furthermore strengthen our resources on corporate bank throughout the organisation and all over Finland to ensure expert and high-level service experience for both private and corporate customers.
The number of participants increased by almost 5,000 and once again, we received a large number of open feedback. The expansion of the Company's service network in the Southwest Finland is shown as growing number of the participants, so there are also many new customers among the participants.
Entrepreneurs and their businesses represent a significant part of our growing customer base. We assist our corporate customers in all practical financial matters and financing needs. We also provide tips on establishing a company and drawing up a business plan. For the second time, EPSI Rating published the EPSI Sustainable Index in Finnish banking industry as a separate research, which describes customers' experience of the sustainability work among banks. OmaSp reached the first place among corporate customers and local sustainability was experienced as the most important factor.
Overall customer satisfaction 4.3
on a scale of 1-5
We employ roughly 500 motivated and enterprising experts in various parts of Finland. A significant proportion of our personnel, 49%, are the bank's shareholders, which contributes to their commitment
and work motivation. It is important to us to promote and maintain the diversity of our work community by recruiting experts of all ages.
Our personnel is our most important resource in implementing our strategy of ensuring first-rate service and customer satisfaction. That is why we want to take care of our employees' satisfaction, both physical and mental wellbeing. Thriving personnel and, as
a result, satisfied customers lay the foundation for our bank's progress and success also in the future. We have added, among other things, low threshold services for occupational health care services. In 2023, we invested around EUR 1,040 per person in occupational health care.
We monitor our employees' well-being, satisfaction and satisfaction with the employer through annual personnel satisfaction surveys. We also monitor absences and the number of occupational accidents. We continuously work
to prevent bullying at the workplace. Our annual goal is to achieve the highest rating in job satisfaction in the sector.
The number of respondents to the employee survey carried out in 2023 was once again a record-high 383, resulting in a response rate of 88%. The results show our longterm efforts to develop our work community. The overall employee satisfaction has remained at a
record-high level, and supervisory work has remained at a great level as a whole.
Overall employee satisfaction
4.5
on a scale 1–5
"During 2023, we have especially put effort on circulation of work and development of expertise. It has been nice to notice how great career paths we have enabled once again and offer career development to our experts in different fields. Career stories have also been made more and more visible, e.g. through videos."
Sarianna Liiri, Director of OmaSp, HR and Finance
We are involved in the Responsible employer campaign. The organisations involved in the campaign are committed to promoting the six principles of the campaign: non-discrimination, flexibility and working life balance, investment in supervisory work, content and meaningfulness of work, remuneration in line with the demands of the job and good applicant experience.
For our personnel, expertise and diverse competence go hand in hand. Our employees are highly enterprising and skilled people who are committed to the people-oriented service at the heart of the bank's strategy.
Every employee has a clear role in the bank's organisation as well as adequate responsibilities and tasks. A learning work community where employees can develop themselves in the manner of their choosing is important to us. The competence of our personnel is also a key competitive factor and therefore, we continuously work to improve it. We have a tailored OmaSp Master training programme, which is implemented in collaboration with the University of Tampere. The programme is intended for the bank's experts and supervisors.
In addition, we organise training weeks targeted at the entire personnel with the aim to develop our personnel's professional skills. In addition to ongoing and regular training, we offer supervisors and experts the opportunity to complete e.g., APV1, APV2, APV ESG and licensed real estate agent (LKV) qualification. We annually monitor the personnel's training hours.
In recent years, our bank has especially developed the supervisory work in a longterm and goal-oriented manner, which is also reflected in the personnel survey as extremely high scores. High quality supervisory work enables the basic for developing teams and individual success. In addition, the applicant experience and orientation to work is continued to develop.
Training days per employee
4.8
in 2023
Company bicycle benefits 124 in use during 2023 Completed APV qualifications 23 during 2023
Our goal is to support the well-being of local communities:
Our goal is to support people in managing and developing their personal finances:
We support our customers in managing and developing their personal finances. We also support the well-being of local communities and ascertain good governance and ethical business throughout the value chain.
We continue our efforts to support SMEs operating
outside urban centres
Over the years, there is not a single breach of the Code of Conduct
We report on our tax footprint
and on our financial figures
We maintain communication on financial management aimed at adolescents and children
We create new jobs within the limits of growth
We continue implementing Yrityskylä and Oma Onni
• During the year, we organised five webinars related to different contents, for example family and inheritance law, sustainable investing, investing for young people and for corporates under the theme Maksimoi menestys – taklaa tappiot (Maximise your success - tackle your losses). The listeners of the webinars were both online and onsite at events organised by the branches.
We continued close collaboration with educational institutions to promote the financial literacy of children and adolescents:
Oma Onni is a web-based learning environment for developing young people's financial literacy. During the school year 2023–2024, more than 3,070 students in 28
secondary schools in 13 towns and cities across Finland will study within the Oma Onni programme. Six foundations that own Oma Savings Bank and six providers of upper secondary education are involved.
pääOma is an e-learning environment for personal finance management
in Sedu's Moodle. Its target group includes students that are entering working life and starting to take more responsibility for their own finances. Content for the learning environment is produced by Sedu's students and teachers of shared qualification modules (YTO). YTO teachers use the pääOma material in their own teaching. pääOma is being developed together with the Oma Onni programme.
NYT Yrityskylä is a Finnish learning environment, which has awarded as the worlds's best learning innovation. It offers positive experience about working live, finance, entrepreneurship and society for sixth- and ninth-graders. Up to 90% of all sixth-graders and 88% of ninth-graders participate in the activity of NYT in Finland. We
participated in the operation of NYT Yrityskylä in Southeast Finland. It reached over 5,000 sixthand ninth-graders in the year 2023.
• Together with IT-support students at training centre SEDU, branches in Seinäjoki Hyllykallio, Alavus Centre, Tuuri, Alajärvi and Ähtäri organised digital support events attended by 120 people.
Supporting people in managing and developing their personal finances
Supporting people in managing and developing their personal finances is an important part of our operations. We facilitate personal financial management for people of all ages through various partnerships, webinars, training events and learning environments.
In 2023, we organised numerous open webinars and training days related to, for example, investing, saving and financial management. The events were open for all and free of charge. We also continued close collaboration with educational institutions to promote the financial literacy of children and adolescents.
We reached over
8,000 children or adolescents to improve their financial skills
• South Karelia's Savings Bank Foundation donated, among other things, EUR 500,000 to LUT University for professorship in "System technology and applications in renewable electricity generation", and EUR 212,000 to South Karelian Foundation for Recreation Areas for Hiitolanjoki nature management and recreational service
• Kuortane's Savings Bank Foundation donated, among other things, EUR 70,000 to Seinäjoki Siirtolapuutarhayhdistys ry for the establishing of electricity and sewer network
• Töysä's Savings Bank Foundation donated, among other things, approx. EUR 30,000 to Sydänliitto for the purchasing of defibrillators in the operating area of
• Lieto's Savings Bank Foundation supported, among other things, by EUR 100,000 to the University of Turku for new installation of the food technology degree programme and by EUR 100,000 for dissertation research in the field of commercial sciences as well as approx. by EUR 30,000 to Turku University of Applied Sciences for promoting entrepreneurship
• Parkano's Savings Bank Foundation donated EUR 150,000 to Suomen Mielenterveysseura Mieli ry (The Association for Mental Health in Finland) for children's and youth's mental
We are committed to working for the wellbeing of Finnish society. We actively promote and develop the vitality of local and regional communities by offering jobs outside urban areas and by financing local private and SME customers.
We annually organise or are involved in local events aimed at enhancing local community spirit and well-being. In addition, our owner foundations and co-operatives distribute grants and subsidies for non-profit purposes every year. These purposes include, for example, economic education, research, children's sports, youth work, culture and nature conservation.
It is important to us to promote the vitality of local communities in Finland and the success of entrepreneurs living outside urban centres. Our cooperation with the Nordic Investment Bank (NIB) and the European Investment Fund (EIF) continues. Among other things, the loan agreement of NIF provides us to allocate euros for improving the competitiveness and success of Finnish SMEs. In addition, for small and micro enterprises there is a preparation of a new guarantee programme on sustainable development, which can be used also for sustainable development projects in housing associations in the future.
It is possible to get financing guarantees for financing for companies at different life cycle stages via OmaSp. This can be, for example, financing the start-up phase of a company, investments, working capital financing or a business acquisition.
We are committed to promoting sustainable economic growth and productive employment. In addition to actively promoting local and regional vitality, we contribute to society through indirect economic impacts by, for example, paying taxes. These proceeds are used to safeguard the basic functions of society and build well-being. Furthermore, the salaries and social benefits paid to personnel have a positive effect on employees and on the surrounding communities.
Our business is guided by our Code of Conduct. In 2023, there were no reports on breaches of our Code of Conduct.
Our goal is to monitor even more closely the sustainability performance of our partners.
In June 2023, Talouselämä magazine published a research of the most profitable banks in Finland. According to the research, OmaSp was Finland's most profitable bank.
educational institutions, and we offer several training and thesis opportunities on a range of educational levels. We are involved in the national Responsible Summer Job campaign. We commit to following the campaign's good summer job principles that help make summer jobs a good experience for both the summer worker and the employer.
In 2023, we employed a total of 67 summer workers in a range of positions in our branches and administration. According to summer workers, the best thing about working with us is the good team spirit and co-workers.
| OmaSp |
|---|
| 20,626 |
| 5,858 |
| 136 |
| Taxes to be collected and accounted (1,000 euros) | OmaSp |
|---|---|
| Value added tax accounted | 671 |
| Withholding tax on wages | 6,477 |
| Withholding tax and tax at source on dividends | 442 |
| Others | 1,253 |
| Total | 35,463 |
We primarily focus on granting secured loans to solvent customers.
We evaluate whether a project to be funded meets the environmental requirements.
We work to compat the increase in short-term loans and we teach people of all ages personal financial management.
We consider environmental, social and good governance issues (ESG factors) in our investment operations.
Sustainable financial and investment solutions
Where possible, we aim to increase our customers' awareness of the state of the environment. OmaSp is involved in the operation The Unique Archipelago Sea. Its goal is a clean and healthy future for the Archipelago Sea, increasing its recognition and appreciation among citizens and decision-makers.
We want to contribute to enhancing biodiversity, and our largest owner, South Karelia's Savings Bank Foundation, has been the key in supporting the conversation of Lake Saimaa's waters for many years.
Through our owner foundations and cooperatives, we also participate in sizeable projects to promote the well-being of the environment and society.
In the suitability assessment of the investment advisory services, we take into account the existing or potential customer's sustainability preferences in choosing the recommended financial instruments. This means surveying and taking into account the EU Taxonomy, the EU disclosure regulation and principal adverse impacts. Before making a product recommendation based on the investment advisory service's suitability assessment, we review the sustainability risks and their likely impact on the return on the financial instruments together with the customer. The suitability assessment means a procedure of collecting information about the customer and assessing the suitability of a specific investment service or financial instrument for the customer. No financial instruments are recommended to customers that are against their sustainability preferences.
Our goal is to create a green framework roadmap for fundraising. We also want to highlight sustainability aspects in all new product descriptions and devise process and system changes for green bonds and instruments.
We know that the financial sector plays a major role in promoting sustainable development in society. It is one of the guiding aspects in our financing decisions. We want to help our customers transition towards a climateresilient economy. For us, it means considering and integrating sustainability aspects in all our investment and financing decisions and allocating funds to where they have the biggest impact on the well-being of the environment, climate and people.
Through our financing decisions we can thus promote the development of environmentally sustainable products and services through these companies. We collaborate with, for example, Finnvera and the European Investment Fund on financial solutions aimed at the green transition. In addition, we have a refinancing partnership with the Nordic Investment Bank, in which the projects to be financed must meet the NIB's environmental mandate.
| Change in markets | Markets change and demand for climate-friendly products increases, which leads to the renewal of product portfolios. Assets are increasingly, and at a lower cost, invested in projects which aim to advance sustainability, and investments with negative impacts are avoided. |
|
|---|---|---|
| Changes in policy measures and legislation | Legislation and other regulations tighten, which causes changes in daily work. Companies are expected to establish hands-on targets for climate-change related work. |
|
| Transition risks | Technological development | Technology changes and the demand for digital services and service channels increases. |
| Reputational risk | Stakeholder demands relating to sustainability change (e.g. green bonds), and more attention is paid to the origin of assets (climate and environmental aspects). Reputational risk arises if the markets do not meet demand as consumer expectations change. The importance of climate change abatement and other sustainability work is also highlighted in communication. |
|
| Physical risks | Extreme weather events and pandemics | Rising temperature, extreme weather events and global pandemics may indirectly interfere with repayment capacity. |
Transition risks also bring with them numerous business opportunities, including the renewal of the product portfolio and increase in digital services. The company's investment strategy can influence how assets are allocated to companies, projects and households in need of financing. Sustainable development is one of the guiding aspects in our financing decisions.
An essential aspect of promoting sustainable development is the management of risks arising from climate change and the mitigation of climate emissions. Climate change calls for new practices to limit the rise in global average temperature to 2°C in accordance with the Paris Agreement.
In 2023
63%
lower emissions intensity per
The compensation for the emission amount of scopes 1-2 corresponds to
EUR 38,200
in the EU's emission trading
We build a sustainable economy and promote climate change mitigation and adaptation. We continuously develop our services so that they encourage customers to take sustainable and environmentally friendly action. We also aim to design our own operations to be as environmentally friendly as possible.
We have identified the main environmental and climate impacts of our operations and the preliminary measures that help us minimise these impacts. We have assessed our environmental impacts through the carbon footprint since 2020. The carbon footprint measures the environmental impacts of our operations through the climate impact. The calculation is based on the GHG Protocol standard. Read more about our carbon footprint in a separate report.
Tightening stakeholder expectations encourage us to actively reduce our climate emissions. OmaSp is moving towards CSRD-compliant sustainability reporting. Information and figures regarding the effects on sustainability factors will be collected even more widely already during 2024.
Our total carbon footprint in 2023 was 9,062 tCO2 e. The carbon footprint grew from the previous years, which can be explained by the company's strong focus on growth and accessibility. Under 1% of the total emissions consist of direct emissions, i.e. the use of company cars. The bulk of the emissions, 94%, consists of other indirect emissions from the supply chain. We can influence these mainly by setting different requirements on our partners' sustainability performance. This is one of our sustainability goals for the upcoming years.
.
The job satisfaction level is based on the overall score given in the annual personnel survey on a scale of 1–5. The survey is conducted by an external provider.
Customer satisfaction is tracked on a scale of 1–5 through the annual 'Best Service' customer survey. The survey is conducted by an external provider.
The reported nominal consumption of thermal energy is weather-corrected (normalised) with the heating demand factor.
The comparison year is 2022 and comparisons have also been made against 2021, 2020 and 2018.
The reported total energy consumption is described, in accordance with the GRI standards' recommendations, divided into direct and indirect energy consumption.
All energy consumption is indirect energy consumption consisting of purchased electricity and district heating.
This OmaSp's sustainability report describes the company's economic, social and environmental impacts for the accounting period 1 January–31 December 2023. The material sustainability themes and aspects addressed in the report are based on a materiality analysis in line with the GRI standards, which is presented in the new sustainability programme. This report describes the new sustainability programme with its targets and the sustainability measures carried out in 2023.
The report is based on the Global Reporting Initiative Standard. At least one indicator for each material main aspect has been reported. The report also follows the Finnish Government's guidelines on corporate social responsibility reporting and the ISO 26000 social responsibility standard. The previous sustainability report was published in 2022. We will also publish sustainability data annually in the future.
The report was implemented in co-operation with EcoReal. The report has not been assured. For more information about Oma Savings Bank Plc's sustainability report, please contact [email protected]
The report focuses on matters controlled by OmaSp, i.e. it covers sustainability figures that are directly linked to the company's own operations. The data in the report is from 2023 and the comparison years are 2022 and 2021.
The key financial figures presented in the sustainability report only cover OmaSp's operations. The figures are directly linked to the company's own operations are based on accounting and the financial statements. The figures are audited.
The calculation of personnel key figures follows the general guidelines. The number of personnel means the number of personnel at the end of the accounting period. This report also indicates the average number of personnel during the accounting period.
Personnel training is monitored through average training days, which are converted into average training hours by multiplying them with the daily working hours, 7.5 h. The training days per employee are calculated for the number of personnel at the end of the accounting period.
Sick leave rate means absences caused by an employee's illness or accident. Sick leave includes, in addition to sick leave prescribed by occupational health care, self-reported absences of 1–3 days due to illness. The average sick leave rate is calculated for the number of personnel at the end of the accounting period.
Accidents include accidents leading to at least one day's absence from work.
The bulk of OmaSp's emissions comes from purchased products and services.
OmaSp's carbon dioxide emissions are calculated in accordance with the GRI standards' recommendations following GHG Protocol's guidelines. In line with
Scope 1 emissions: The number of kilometres driven with the company's own or leased vehicles based on the paid per-kilometre allowances. It is assumed, that all drives are made with a gasoline-powered car. Emission factors VTT's Lipasto database.
Scope 2 emissions: For electricity, the consumption figures are based on paid amounts and, where unavailable, an estimate of the average nominal consumption of electricity in office properties. For district heating and cooling, the consumption figures are based on an estimate of the average nominal consumption of district heating in office properties.
Location-based: The calculation uses countryspecific average emission factors. The emission factors for electricity are based on Statistic Finland's electricity generation data in Finland in 2019-2021, where co-production is divided by the energy method. The emission factors for district heating are based on district heating statistics for 2019-2021, where co-production is divided by the energy method. The emission
factors for district cooling Energiateollisuus / Bionova.
Market-based: For the 2021-2023 figures, green electricity purchased has been taken into account. For the 2020, starting from 1 July 2020, purchased green energy has been taken into account. The rest is calculated using the residual mix. Emission factors for electricity Ecoinvent / Bionova. Emission factors for district heating are based on years 2019-2021 district heating statistics. Emission factors of district cooling for 2019-2022 Energiateollisuus / Bionova. In the year 2023, OpenCO2 net.
Scope 3 emissions: Purchased products and services: the input data on purchased goods and services and leased goods was collected in euros using accounting. Emission factors DEFRA / Bionova, ADEME / OpenCO2 net, ENVIMAT / OpenCO2 net.
Work-related travel: Work-related travel of employees during working hours using public transport based on travel compensation and receipts. Emission factors VTT's Lipasto database.
the guidelines, the emissions in the report are divided into direct and indirect emissions (scopes 1–3). The main input data used in the calculation is indicated in the figure.
More information can be found in a separate carbon footprint report.
Direct economic value generated and distributed
| Direct economic value generated |
|---|
| Economic value distributed |
| c. IT expenses (included in Other operating expenses) |
| d. Depreciation and amortisation on tangible and |
| Stakeholders | Cashflows 2023 |
Cashflows 2022 |
Cashflows 2021 |
|---|---|---|---|
| Direct economic value generated | |||
| a. Total operating income | 247,067,000 | 144,392,000 | 156,565,000 |
| Economic value distributed | |||
| b. Personnel expenses | 29,611,000 | 24,316,000 | 20,631,000 |
| c. IT expenses (included in Other operating expenses) | |||
| d. Depreciation and amortisation on tangible and intangible assets |
8,422,000 | 7,543,000 | 10,267,000 |
| e. Other operating expenses | 52,617,000 | 41,203,000 | 34,396,000 |
| Taxes payable (EUR 1,000) | |||
|---|---|---|---|
| Corporation tax | |
|---|---|
| ----------------- | -- |
| Summary (EUR 1,000) | 2023 | 2022 | 2021 |
|---|---|---|---|
| Taxes payable for the accounting period | 26,620 | 11,330 | 16,450 |
| Taxes to be collected and accounted for the accounting period | 8,843 | 7,439 | 4,670 |
| Total tax footprint | 35,463 | 18,769 | 21,120 |
| Taxes payable (EUR 1,000) | 2023 | 2022 | 2021 |
| Corporation tax | 20,626 | 6,829 | 12,848 |
| Employer's tax | 5,858 | 4,482 | 3,572 |
| Other taxes | 136 | 19 | 30 |
| Taxes to be collected and accounted | 2023 | 2022 | 2021 |
| Value added tax accounted | 671 | 423 | 404 |
| Withholding tax on wages | 6,477 | 6,106 | 3,745 |
| Withholding tax and tax at source on dividends | 442 | 547 | 461 |
| Other taxes | 1,253 | 363 | 60 |
Data as tables: Economic responsibility
| (EUR 1,000) | 2023 | 2022 | 2021 |
|---|---|---|---|
| Net interest income | 197,045 | 104,930 | 80,130 |
| Total operating income | 247,067 | 144,392 | 156,565 |
| Total operating expenses | -90,550 | -73,062 | -65,294 |
| Cost/income ratio (%) | 36.9% | 50.7% | 41.9% |
| Impairment losses on financial assets, net | -17,126 | -1,747 | -7,294 |
| Profit before taxes | 138,048 | 69,226 | 83,271 |
| Profit/loss for the accounting period | 110,051 | 55,379 | 66,252 |
| Balance sheet total | 7,642,906 | 5,941,766 | 5,372,633 |
| Equity | 541,052 | 364,961 | 401,294 |
| Total return on assets, ROA % | 1.6% | 1.0% | 1.4% |
| Return on equity, ROE % | 24.3% | 14.5% | 17.6% |
| Earnings per share (EPS), euros | 3.49 | 1.85 | 2.22 |
| Equity ratio | 7.1% | 6.1% | 7.5% |
| Total capital, % | 16.5% | 14.9% | 15.6% |
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Number of personnel at the end of the accounting period | 464 | 357 | 333 |
| Men | 162 | 131 | 113 |
| Women | 302 | 226 | 220 |
| Other or information missing | |||
| Average number of personnel | 389 | 350 | 307 |
| Men | 138 | 129 | 104 |
| Women | 251 | 221 | 203 |
| Other or information missing | |||
| Number of permanent employment contracts | 395 | 296 | 284 |
| Men | 131 | 100 | 91 |
| Women | 264 | 196 | 193 |
| Other or information missing | |||
| Number of fixed-term employment contracts | 69 | 61 | 49 |
| Men | 31 | 31 | 22 |
| Women | 38 | 30 | 27 |
| Other or information missing | |||
| Number of zero-hour employment contracts | |||
| Men | 0 | 0 | 0 |
| Women | 0 | 0 | 0 |
Other or information missing
| 2023 | 2022 | 2021 |
|---|---|---|
| Number of part-time employees | 40 | 25 | 23 |
|---|---|---|---|
| Men | 16 | 14 | 10 |
| Women | 24 | 11 | 13 |
| Other or information missing | |||
| Number of full-time employment contracts | 423 | 332 | 310 |
| Men | 137 | 117 | 103 |
| Women | 286 | 215 | 207 |
| Other or information missing | |||
| Personnel turnover, incoming employees | 26.0% | 28.0% | 21% |
| Personnel turnover, outgoing employees | 20.0% | 19.3% | 20% |
| Average age of personnel | 37 years | 36 years | 38 years |
| Number of retiring employees | 5 | 4 | 3 |
| Number of terminated employment contracts | 0 | 0 | 0 |
| Number of personnel laid off and average duration | 0 | 0 | 0 |
| Women under 30 years | ||
|---|---|---|
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Employment relationships started (persons) | |||
| Women under 30 years | 43 | 38 | 24 |
| Women 30-50 years | 18 | 11 | 11 |
| Women over 50 years | 2 | 0 | 5 |
| Men under 30 years | 33 | 32 | 20 |
| Men 30-50 years | 11 | 10 | 9 |
| Men over 50 years | 1 | 0 | 1 |
| Employment relationships ended (persons) | |||
| Women under 30 years | 15 | 11 | 15 |
| Women 30-50 years | 23 | 16 | 18 |
| Women over 50 years | 12 | 12 | 10 |
| Men under 30 years | 13 | 13 | 10 |
| Men 30-50 years | 16 | 11 | 8 |
| Men over 50 years | 3 | 1 | 5 |
| . . × I ۰. ۰. × |
|---|
| -------------------------------- |
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Persons employed outside the organisation | - | - | - |
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Number of employees covered by collective bargaining agreements |
96.0% | 96.1% | 96.6% |
| Employees not covered by collective bargaining agreements |
4.0% | 3.9% | 3.4% |
| 2023 Men |
2023 Women |
2022 Men |
2022 Women |
2021 Men |
2021 Women |
|
|---|---|---|---|---|---|---|
| Board of Directors | 6 | 2 | 5 | 2 | 5 | 3 |
| Executive management | 4 | 3 | 4 | 3 | 4 | 3 |
| Managers | 25 | 28 | 27 | 21 | 24 | 22 |
| Salaried employees | 133 | 271 | 100 | 202 | 85 | 195 |
| Total | 168 | 304 | 136 | 228 | 118 | 223 |
Customer-related key figures
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Number of customers (approx.) | 200,000 | 160,000 | 150,000 |
| Customers' satisfaction with their own contact person | 4.6 | 4.7 | 4.7 |
| Overall customer satisfaction | 4.3 | 4.3 | 4.4 |
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Annual total compensation paid to the highest-paid individual in the organisation (EUR) |
EUR 1,461,000 | EUR 1,938,916 | EUR 600,460 |
| Median annual total compensation paid to the organisation's employees (excluding the highest-paid individual) |
EUR 35,000 | EUR 35,743 | EUR 33,502 |
| 2021 | 2022 | 2023 |
|---|---|---|
| Occupational accidents leading to absence | 6 | 2 | 1 |
|---|---|---|---|
| Work-related deaths | 0 | 0 | 0 |
| Sick days | 3,018 | 2,188 | 1,441 |
| of which men | 685 | 421 | |
| of which women | 2,333 | 1,767 | |
| Sick days on average per person | 8.5 | 6.1 | 4.3 |
| Sick leave rate | 3.1 | 2.8 | 2.0 |
| Number of harassment and bullying cases | 1 | 3 | 2 |
| Personnel's job satisfaction | 4.5 | 4.5 | 4.5 |
| 2023 | 2022 | 2021 | ||||
|---|---|---|---|---|---|---|
| persons | % persons | % persons | % | |||
| Higher university degree | 108 | 23 | 75 | 21 | 62 | 19 |
| Lower university degree | 10 | 2 | 10 | 3 | 7 | 2 |
| Polytechnic or equivalent | 151 | 33 | 112 | 31 | 88 | 26 |
| Vocational college or equivalent | 128 | 28 | 103 | 29 | 84 | 25 |
| Other education | 67 | 14 | 57 | 16 | 92 | 28 |
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Training days (days) | 4.8 | 11.7 | 8.4 |
| Personnel covered by development discussions (100%) | 100% | 100% | 100% |
Total energy consumption, MWh
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Purchased electricity | 2,235 | 1,781 | 1,244 |
| Purchased district heating | 2,369 | 1,846 | 1,537 |
| Total | 4,604 | 3,627 | 2,781 |
OmaSp's carbon dioxide emissions, tCO2 e
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Scope 1. Direct emissions, tCO2e | ||||||
| Category 1: Emissions from company cars | 10.4 | 7.3 | 2.2 | 4.2 | 1.5 | 37.9 |
| Scope 2. Indirect emissions, market-based, tCO2e | ||||||
| Category 1: Purchased electricity | 422.7 | 360.4 | 177.3 | 0 | 0 | 0 |
| Category 2: Purchased district heating | 248.1 | 261.2 | 216.9 | 208.0 | 252.6 | 374.3 |
| Category 3: Purchased district cooling | 17.9 | 17.9 | 17.9 | 15.0 | 6.8 | 0 |
| Scope 2. Indirect emissions, local-based*, tCO2e | ||||||
| Category 1: Purchased electricity | 208.4 | 232.4 | 200.0 | 206.0 | 161.0 | 172.1 |
| Category 2: Purchased district heating | 248.1 | 261.2 | 216.9 | 208.0 | 252.6 | 374.3 |
| Category 3: Purchased district cooling | 17.9 | 17.9 | 17.9 | 15.0 | 6.8 | 10.3 |
| Scope 3. Other indirect emissions, tCO2e | ||||||
| Category 1: Purchased products/services | 3,467.5 | 3,407.5 | 3,169.6 | 3,728.4 | 5,208.1 | 8,470.2 |
| Category 2: Leased products | 325.9 | 351.9 | 365.1 | 293.0 | 393.0 | 109.5 |
| Category 3: Work-related travel | 13.4 | 8.4 | 2.7 | 2.7 | 7.7 | 69.9 |
| Total emissions, tCO2e | 4,506 | 4,415 | 3,952 | 4,251 | 5,870 | 9,062 |
| Emissions intensity (scopes 1-2), tCO2e/employee |
2.4 | 2.2 | 1.4 | 0.7 | 0.7 | 0.9 |
| Emissions intensity (scopes 1-3), tCO2e/employee |
15.6 | 14.7 | 13.2 | 13.5 | 16.8 | 19.5 |
* Calculated as a reference in accordance with the GHG Protocol guidelines. The total emissions are based on the market-based figure.
The carbon footprint refers to the climate emissions that are generated as a result of human actions and deeds in a certain period. A company's carbon footprint maps the greenhouse gas emissions arising through its activities. Carbon footprint formation depends on the company's actions. That's why a company's carbon footprint is always calculated on a case-by-case basis. In the calculation the emissions are reported as carbon dioxide equivalents, of which the abbreviation CO2 equivalent (CO2 e) is used. It reflects different greenhouse gases modified for global warming effect corresponding the effect of carbon dioxide in the atmosphere.
The carbon footprint calculation method used in this work is based on GHG Protocol standard which allows companies to calculate their operations greenhouse gas emissions. According to the instructions the emissions are sorted into three different dimension:
Oma Savings Bank Plc builds sustainable economy and promotes mitigating and adapting to climate change. The company's products and services are developed so that they encourage customers to take sustainable and environmentally friendly action. The company aims to plan its operations to be as low carbon as possible in order to reduce the total carbon footprint.
This report brings together Oma Savings Bank Plc's carbon footprint from year 2023. The calculation has been made at the organizational level identifying the main sources of emissions from the activity. The report deals with the calculation methods used as well as the calculation score.
Date of calculation 16 February 2024 Calculation and report was made by EcoReal Oy.
Scope 1: direct emissions
Direct emissions are generated by journeys made with company-owned or leased vehicles, and emissions from refrigeration equipment in some few premises.
OmaSp has premises where electricity, district heating and district cooling are purchased. The emissions generated by these purchasing energies fall under this scope. OmaSp is able to indirectly influence purchasing energy emissions through its energy choices. In practice, the company has the potentian to influence only the purchase of energy.
OmaSp's indirect value chain emissions arise indirectly during the entire chain of operations of the company. The most essential emissions arise from purchased products and services, business travel and commuting, and waste generated. In addition, emissions from investments such as finance, funds and real estate investments fall into this category.
OmaSp has identified the main climate impacts of its operations and defined the preliminary measures that will help the company to minimise its climate impacts.
Climate emissions are mainly indirect emissions that we cannot directly influence. These include purchased products and services, business travel and employee business travel. Indirect emissions also include emissions from investments such as finance, funds and investments. OmaSp's goal is to increase the transparency of responsible investment in its funds and, through this, promote sustainable economy and minimise the carbon footprint of its investments.
The calculation applies to 2023. The starting year of the carbon footprint calculation in 2018 and the previous year 2022 have been used as comparison.
Scope 2 emissions have been calculated on the basis of location and procurement according to the guidance of the GHG Protocol standard. The aggregate emissions have taken advantage of procurement-based value.
A more detailed specification of the input data is summarized in the appendix to the carbon footprint report "Data Sources".
The calculation of the carbon footprint was included the actual business of the company. After reviewing the operating environment and identifying the greatest climate impacts of the operation, calculation limits were defined to determine the carbon footprint. It was decided to include in the calculation:
The area of the real estate portfolio was 22,610m2 in year 2023. The area increased by 17% from 2022. The number of personnel was approximately 445 in the financing year 2023. The number of personnel increased by 26% from 2022.
The following things were excluded from the calculation due to irrelevance or challenging access to data:
In the case of electricity, consumption is based on payments figures and, to a lesser extent, an estimate of the average specific consumption of electricity in office buildings. For district heating and cooling, consumption is based on an estimate of the average district heating specific consumption in office properties.
Scope 1 emissions Kilometers driven by the company's own or leased vehicles based on paid mileage allowances. It is assumed that all trips are made by gasoline vehicles. Emission factors VTT Lipasto Database. Scope 2 emissions Market-based: For figures for 2021-2023, purchased green electricity has been taken into account. For 2020 figures, purchased green electricity has been taken into account from 1 July 2020, other share is calculated using residual distribution. Power emission factors Ecoinvent / Bionova. District heating emission factors are based on district heating statistics for 2019–2021. District cooling emission factors for 2019-2022 Energiateollisuus / Bionova. In year 2023 OpenCO2 net.
Location-based: Country-specific average emission factors are used in the calculation. Electricity emission factors are based on Statistics Finland's electricity production data for 2019–2021, where co-production is divided with energy method. Emission factors of district heating are based on district heating statistics for 2019-2021, where co-production is divided with energy method. Emission factors of district cooling Energiateollisuus / Bionova.
Purchased products and services: Input data on purchased goods and services and leased goods were collected at the euro level using the accounts. Emission factors DEFRA / Bionova, ADEME / OpenCO2 net, ENVIMAT, OpenCO2 net.
Business Travel: During employee working hours business trips by public transport were collected using the accounts at a level denominated in euro. Emission factors VTT Lipasto Database.
According to the calculation OmaSp's total carbon footprint was 9,072 tons CO2 e in 2023 (5,870 tons CO2 e in 2022). The carbon footprint increased by almost 54% from the previous year, which means about 3,192 tons more emissions compared to 2022. The increase was due to a strong increase in the use of computer programming and consultancy services, which in turn is the result of OmaSp's investments in growth and accessibility. The number of offices increased by eight and the number of employees increased by 26% compared to the year 2022.
Almost all emissions, i.e., 94% (96%) of CO2 emissions consist of purchased or leased products and services. This is typical for a company that provides services. About 4% (4%) of total emissions come from energy consumption of offices. Emissions from mobility, i.e., dimensions 1 and 3 account for 1% (under 1%) of the company's total emissions. The carbon footprint distributed very similarly the previous year.
tons more emissions due to investments in growth compared to 2022
In 2023 number of offices
+8
compared to 2022
In 2023 number of employees
+26%
compared to 2022
108 Annual Report 2023 Contents Contents OmaSp in Brief Sustainability Sustainability Corporate Governance Report of Board of Directors Financial Statements 109
purchased products and services and leased products. Business travel has quite little impact
OmaSp's carbon footprint distribution to direct and indirect emission (scopes) according to GHG Protocol guidelines are presented in the figure and table. As previously stated, the most significant emissions are from scope 3, i.e., on emissions. If only the direct emissions (scope 1) of the company were taken into account, they were approximately 38 tons CO2 e in total and about 0.42% of total emissions in year 2023.
| Oma Savings Bank's carbon dioxide emissions (tCO2e) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|
| Scope 1. Direct emissions, tCO2e | ||||||
| Category 1: Emissions from company cars | 10.4 | 7.3 | 2.2 | 4.2 | 1.5 | 37.9 |
| Scope 2. Indirect emissions, purchase-based, tCO2e | ||||||
| Category 1: Purchased electricity | 422.7 | 360.4 | 177.3 | 0 | 0 | 0 |
| Category 2: Purchased district heating | 248.1 | 261.2 | 216.9 | 208.0 | 252.6 | 374.3 |
| Category 3: Purchased district cooling | 17.9 | 17.9 | 17.9 | 15.0 | 6.8 | 0 |
| Scope 2. Indirect emissions, location-based*, tCO2e | ||||||
| Category 1: Purchased electricity | 208.4 | 232.4 | 200.0 | 206.0 | 161.0 | 172.1 |
| Category 2: Purchased district heating | 248.1 | 261.2 | 216.9 | 208.0 | 252.6 | 374.3 |
| Category 3: Purchased district cooling | 7.9 | 17.9 | 17.9 | 15.0 | 6.8 | 10.3 |
| Scope 3. Other indirect emissions, tCO2e | ||||||
| Category 1: Purchased products/services | 3,467.5 3,407.5 3,169.6 3,728.4 5,208.1 8,470.2 | |||||
| Category 2: Leased products | 325.9 | 351.9 | 365.1 | 293.0 | 393.0 | 109.5 |
| Category 3: Business travel | 13.4 | 8.4 | 2.7 | 2.7 | 7.7 | 69.9 |
| Total emissions, tCO2e | 4,506 | 4,415 | 3,952 | 4,251 | 5,870 | 9,062 |
| Emission intensity (scopes 1-2), tCO2e/employee | 2.4 | 2.2 | 1.4 | 0.7 | 0.7 | 0.9 |
| Emission intensity (scopes 1-3), tCO2e/employee | 15.6 | 14.7 | 13.2 | 13.5 | 16.8 | 19.5 |
*Calculated as a reference according to GHG Protocol guidelines. Purchase-based figures are used for total emissions.
Other work-related travel Company's own and leased cars
Emission intensity (tCO2e/person) 0.08 0.05 0.02 0.03 0.03 0.24 +700% +200%
OmaSp's emissions from purchases have been increasing in recent years. In 2023, the emissions from purchases increased by 63% compared to 2022. In the previous year, the emissions increased by 40% compared to 2021. Most significant emissions consist of services purchased outside the company.
| Key figures from purchases 2018-2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2018 2019 2020 2021 2022 2023 vs. 2022 | vs. 2018 |
|||||||
| Emissions from purchases (tCO2e) |
3,468 3,408 3,170 | 3,728 5,208 8,740 | +63% | +144% | ||||
| Number of personnel | 288 | 300 | 299 | 315 | 352 | 445 | +26% | +55% |
| Emission intensity (tCO2e/person) |
12.0 | 11.4 | 10.6 | 11.8 | 14.8 | 19.0 | +28% | +58% |
Other major sources of emissions are postal services as well as computers and other office equipment. The biggest change in purchases has been in emissions from ICT services. These emissions have increased by 1,935 tons i.e., 61% compared to the year 2022, as OmaSp has invested in growth and the development of digital services. In addition, the emissions of coffee expenses have increased by 896 tons. These emissions include also food products.
0 2000 4000 6000
2023 2022 2018
.
The same amount of emissions corresponds to 63 million kilometer drive2 .
The same amount of emissions per employee is generated from 5 return flighs from Helsinki to Oulu4 .
If the emissions of scopes 1–2 (in total 412 tCO2 e) would be compensated it would currently mean a cost of around 38,200 euros in the EU emissions trading system. In proportion to the number of employees the compensation would cost 86 euros per employee. Compensation for emissions of scopes 1–3 would cost around 841,044 euros or 1,890 euros per employee. Comparing the emission intensity of scopes 1–3 with the average of other companies in the field is not meaningful as the calculations of emissions of scope 3 is just becoming common. The results of emission calculations in scope 3 is very significantly influenced by calculation limits and differences in calculation methods.
In 2023 63% lower emission intensity per employee (scopes 1 and 2) compared to the year 2018 0.6% long-haul flights of total emissions
In 2023
Based on the carbon footprint calculation, OmaSp's greenhouse gas emissions (scopes 1–2) are quite typical among the industry. Emissions per employee is around 0.9 tCO2 e/employee. In the previous year, the emission intensity was 0.7 tCO2 e/employee. Compared to 2018 the emission intensity has decreased by 63%. The result has been most affected by the transition to renewal electrical energy.
The emission intensity in scopes 1–2 has been an average of 0.8 tCO2 e/employee in the industry in previous years. In 2023 OmaSp's emission intensity per employee (scopes 1 and 2) was the same as the industry average. The comparison of emissions is indicative, as the results of the calculation are influenced by differences in the calculation methods. The comparison made is based on public reports in the field.
The Group's parent company is Oma Savings Bank Plc, whose domicile is in Seinäjoki. Oma Savings Bank Group comprises the parent company Oma Savings Bank Plc, and its subsidiary Real estate company Lappeenrannan Säästökeskus (100% holding). In addition, the Group has associated companies GT Invest Oy (48.7% holding) and City Kauppapaikat Oy (43.3% holding) as well as joint ventures and joint operations SAV-Rahoitus Oyj (48.2% holding), Figure Taloushallinto Oy (25% holding), Deleway Projects Oy (49% holding) and Housing company Seinäjoen Oma Savings Bank house (30.5% holding).
We comply with the Finnish Corporate Governance Code approved by the Securities Market Association and valid at any given time. In accordance with the Corporate Governance Code, we have published the report Corporate Governance Statement for the financial year 2023. The CG Statement is available on the company's webpage at omasp.fi/en/ investors/management-and-corporategovernance. We refer to the content of the completed CG Statement in the Corporate Governance.
The Corporate Governance Code is available in its entirety on the Securities Markets Association's website at https://www.cgfinland.fi/en
In its decision-making and governance, the Company complies with the with existing legislation, OmaSp's Articles of Association, the charters of OmaSp's Board of Directors and its committees and the rules and guidelines of Nasdaq Helsinki Ltd.
Efficient management of insider issues of a publicly listed Company requires that insider administration is arranged in a consistent and reliable manner. The obligations concerning the arrangement of insider administration are binding to publicly listed companies. OmaSp complies with the insider guidelines of Nasdaq Helsinki Ltd (Helsinki Stock Exchange). In addition, the Company has internal Insider Guidelines approved by the Board of Directors based on the guidelines of Helsinki Stock Exchange. Compliance with the insider guideline, monitoring the notification obligation, and maintaining the insider registers are the responsibility of OmaSp's Chief Legal Officer.
Elina Näsänen, Lieto
OmaSp's highest decision-making body is the General Meeting of Shareholders. The Annual General Meeting is held once a year before the end of June on a day specified by the Board of Directors.
The Annual General Meeting makes decisions pertaining to, among other things, the election of the Board members, the auditor and deputy auditor, remuneration paid to these, validating the financial statements and consolidated financial statements, discharging from liability the Board members and the CEO, and the use of the profit shown on the balance sheet. Other matters to be discussed at the Annual General Meeting according to the Limited Liability Companies Act or matters requested to be addressed by a shareholder in accordance with the Finnish Companies Act may also be discussed at the meeting. An Extraordinary General Meeting is held when the Board of Directors considers it necessary, or when it must be held pursuant to the law. In order to ensure interaction between shareholders and the Company's governing bodies and to implement the shareholders' right to request information, the CEO, and the chairman and
the members of the Board of Directors will attend the General Meetings. Board member candidate must attend the General Meeting that decides on the election. Each Company share entitles to one vote at a General
Meeting.
The notice to the Annual General Meeting shall be published on OmaSp' s website and, if the Board of Directors so decides, in one or more national newspapers and/or in writing to shareholders, no earlier than three (3) months before the record date of the Annual General Meeting and no later than three weeks before the Annual General Meeting, however always at least nine (9) days before the record date of the Annual General Meeting referred to in the Companies Act. The Annual General Meeting documents are kept on OmaSp' s website for at least five years from the date of the Annual
General Meeting.
The Annual General Meeting of the Company was held on 30 March 2023. After an exceptional period, the meeting was held in Helsinki, where the shareholders were present.
Under the Articles of Association, the Board of Directors of OmaSp has a minimum of five and a maximum of eight regular members and a maximum of two deputy members. The General Meeting decides on the number of members on the Board of Directors, elects the Board members, and decides on their remuneration based on the proposal of the Nomination Committee, which consists of representatives of the shareholders. The term of office of the members of the Board of Directors begins at the closing of the Annual General Meeting and ends at the closing of the next Annual General Meeting. The Board elects a chairman and deputy chairman from among its members.
According to the Board of Directors, all members of the Company's Board of Directors with the exception of one member are independent of the Company and all members of the Board are independent of the Company's significant shareholders. None of the Board members are and have not been an employee of the Company.
Members of the Board of Directors of OmaSp and executive directors meet the trustworthiness and qualification requirements laid down in Chapter 7, Section 4, of the Credit Institutions Act.
The Board of Directors of OmaSp
Deputy chairman Jyrki Mäkynen Member Aila Hemminki Member Aki Jaskari Member Timo Kokkala
Member Jaakko Ossa from 30 March 2023 Member Jarmo Partanen until 30 March 2023 Member Jaana Sandström
Name Education Main occupation Position
in the Board
Jarmo Salmi b. 1963
Master of Laws Asianajotoimisto Jarmo Salmi Oy, CEO Chairman
Jarmo Salmi has been the Chairman of the board of OmaSp since 2019 and a member of OmaSp's Board of Directors since 2014. Salmi has served as the CEO of Asianajotoimisto Jarmo Salmi Oy since 2014, and as a lawyer and responsible partner at Asianajotoimisto Lasse Salmi ky 1991–2014. In addition, Salmi has served as the Chairman of the Board of Kiinteistö Oy Kosken-Keskus since 2014 and as a member of the Board of the Finnish Bar Association in 2012–2015.
Jyrki Mäkynen b. 1964
M.Sc. (Economics)
Oy HM Profiili Ab, entrepreneur Deputy Chairman
Jyrki Mäkynen has been the Vice Chairman of OmaSp's Board of Directors since 2014 and served as the Chairman of the Board in 2009-2014. Mäkynen has been an entrepreneur at Oy HM Profiili Ab since 1992 and as Sales Director of Oy HM Profiili Ab in 1992–2002 and as CEO since 2003. Mäkynen has been a member of the Board of Fennia Insurance since 2017 and as Vice Chairman of the Board since 2021. In addition, Mäkynen has been a member of the Bank of Finland's Payment Council in the years 2014–2022, Mäkynen has been the Chairman of the Board of the Federation of Finnish Enterprises in 2014–2020 and the President of the Council in 2020–2022, the Vice Chairman of the Board of SMEunited in 2014–2020, the Chairman of the Board of the Southern Ostrobothnia University Foundation in 2010–2021 and as a Vice Chairman of the Board of Seinäjoki Joint Municipal Authority for Education Sedu in 2017–2021, as a member of the Board of Seinäjoki University of Applied Sciences 2013–2021, as a member of the Seinäjoki City Council in 2004–2021 and as a member of the city's Board in 2009–2012.
Aila Hemminki b. 1966
M.Sc. (Business and Administration) RDI
Seinäjoki University of Applied Sciences, expert, Member
Aila Hemminki has been a member of OmaSp's Board of Directors since 2017. Hemminki has been an expert in business projects in Seinäjoki University of Applied Sciences, RDI since September 2021. In addition, Hemminki has been a board member of Talotekniikka Koivuluoma Oy since 2022. Hemminki has worked as a Change of Ownership Specialist for the Regional Organization of South Ostrobothnian Entrepreneurs in 2018–2021. Hemminki established the Vauvatarvike Huvikumpu ky (today Hevihill ky) in 1990 and worked as a shop trader until 2008. Since then, entrepreneurship has included management of rental properties. Aila Hemminki has held various positions at the Savings Bank Foundation of Kuortane during 2009–2017. She has been a deputy member of the Board of Hemimotors Oy since 1999 and a member of the Board of Into Seinäjoki in 2017–2021.
Aki Jaskari b. 1961
M.Sc. (Business and Administration)
Nerkoon Höyläämö Oy, CEO Member
Aki Jaskari has been a member of OmaSp's Board of Directors since 2014. Jaskari has served as the CEO of Nerkoon Höyläämö Oy since 1995. In addition, Jaskari has been a member of the Advisory Board of Leppäkosken Sähkö Group Oy since 2001, a member of the Regional Advisory Committee of Pohjola Insurance Oy in 2001–2015 and as a member of the Board of the Parkano Savings Bank in 2010–2013.
in the Board
Timo Kokkala b. 1960
M.Sc.
(Agriculture and Forestry) Farmer Member
Timo Kokkala has been a member of OmaSp's Board of Directors since 2014. Kokkala has been a farm operator since 1989. In addition, Kokkala has served as the Chairman of the Board of Hauho Savings Bank in 1998–2008 and of Kantasäästöpankki Oy in 2009–2014 and as a member of the Supervisory Board in the Savings Bank Union in 2012–2014.
Jaakko Ossa b. 1965
Doctor of Laws Ossa Partners Oy, CEO Member
Jaakko Ossa has been a member of OmaSp's Board of Directors since 2023. Jaakko Ossa has been a professor of financial law at the University of Turku since 1998. Ossa has an extensive written production, particularly in the field of corporate taxation and investment taxation. Along with his academic career, Ossa has held expert positions at Asianajotoimisto Astrea Oy for around 20 years and currently at Ossa Partners Oy, a family company. Ossa has been as a member of the Board of several companies, including Liedon Savings Bank, Sp-Fund Management Company and the Savings Bank Association. In addition, he is currently the Chairman of the delegation of Taxpayers Association of Finland (TAF) and the inspector of the Satakuntalais-Hämäläinen Student Nation (osakunta) of the University of Turku.
D.Sc. (Tech.) Lappeenranta University, Professor of Accounting Member
Jaana Sandström has been a member of OmaSp's Board of Directors since 2019. Sandström is a Professor of Strategic Accounting at LUT University and she will begin her third term as the Vice Rector for education at LUT University in early 2023. Before her terms as Vice Rector, she was the Dean of LUT University School of Economics in 2009–2014. In the years 1991–2008, Sandström worked at LUT University as a lecturer and as a temporary assistant to the professorship. Prior to her academic career, Sandström worked in the forest industry from 1987 to 1991 at Enso Gutzeit Oy and Ekono Oy. Among the current key positions of trust are the Second Vice-Chairmanship of the Board of Directors and the Chairmanship of the Committee on Scholarships of the Foundation for Economic Education. Sandström has served as a member of the Board of the South Karelian Cooperative in 2013–2019 and as a member of EPAS Accreditation Board of the European Foundation for Management Development (EFMD) in 2013–2019. In academic positions of trust, Sandström has worked as an opponent, as an evaluator of scientific articles and conferences, as well as an expert in the field of professorships since 2000.
The Board held 16 meetings during the financial year, of which 5 were email meetings.
The Company maintains a list of executives and their related parties. The Company's executives shall inform the Company of their related parties upon taking on their responsibilities and of any changes in their related parties immediately and no later than three days from the change.
The Company executives and their related parties are subject to trading restrictions applying to Company shares, and the executives' and their related parties' notification obligations concerning such transactions are described in the Company's Insider Guidelines.
Oma Savings Bank Plc's shares owned by the Board members and their controlling companies on
31 December 2023
| Jarmo Salmi | 4,998 |
|---|---|
| Jyrki Mäkynen | 17,519 |
| Aila Hemminki | 8,699 |
| Aki Jaskari | 8,886 |
| Timo Kokkala | 15,250 |
| Jaakko Ossa | 1,300 |
| Jaana Sandström | 3,100 |
OmaSp's Board of Directors has approved the diversity principles for the Board. OmaSp's aim is to promote the election of the most qualified members of the Board of Directors while ensuring equal opportunities for candidates of both genders to be elected. Both genders are represented in the Board of Directors, and candidates for Board membership are appointed in accordance with this equality goal so that, in the election, attention is paid to the added value brought by the members to the composition of the Board in terms of maintaining and developing sufficient diversity, among other aspects. Diversity is maintained and developed by ensuring broad competence and experience, regional representation and sufficient representation of both genders and different age groups among the nominees.
Women make up 28.5 percent of Board members.
The Board of Directors represents the Company and takes care of the administration of the Company and the trustworthy and appropriate organisation of its operations. The Board of Directors ensures that the Company has business strategies, operating principles and an appropriate organisational structure, and an authorisation system and that the executive directors of the Company are competent, trustworthy and suitable to their tasks.
The Board shall see to it that the Company has sufficient risk management systems and ensure that business risks are identified and evaluated. The Board of Directors shall approve risk-taking principles, establish the procedures used to mitigate risks, and oversee compliance with these. The Board shall ensure that internal control and internal audit are appropriately organised. In its activities, the Board complies with the charter it has approved. In the charter, the tasks of the Board of Directors, its chairperson and members, organising the meetings, and evaluation of the Board of Directors' work are described in more detailed. The charter of the Board of Directors is accessible on the Company's website at omasp.fi/en/investors/mangement-and-corporategovernance/board-directors
The Nomination Committee's duty is to prepare proposals pertaining to the appointment and remuneration of the members of the Board of Directors for the next Annual General Meeting or, when necessary, an Extraordinary General Meeting.
Each of the five largest shareholders of the Company is entitled to appoint a representative to the Nomination Committee. If a shareholder does not wish to exercise its right to nominate a member, the right will be transferred to the next largest shareholder who would not otherwise have a nomination right. The Company's largest shareholders are determined since the registered holdings in the Company's list of shareholders on the 1st of June preceding the Annual General Meeting. The Nomination Committee shall submit its proposals on the members of the Board of Directors and their remuneration to the Company's Board of Directors by the end of the January preceding the Annual General Meeting. The Nomination Committee's proposals for an Extraordinary General Meeting shall be submitted in a similar manner well ahead of the General Meeting and taking into account the relevant regulations.
The Nomination Committee's meetings are convened by the chairman of the Board of Directors, who also attends the meetings in his/her role as an expert. In its work, the Nomination Committee complies with the Charter approved by the Annual General Meeting
The Company does not have an appointed audit committee. The Company's Board of Directors performs the duties of the Audit Committee according to regulations.
The Board has a Remuneration Committee. The Remuneration Committee is composed of a minimum of three members, which are elected by the Board among its members annually. The Board specifies the Remuneration Committee's duties in its adopted charter. The duties of the Remuneration Committee include preparing matters pertaining to the remuneration and other financial benefits of the CEO and other management members, preparing matters pertaining to reward schemes, assessment of the remuneration of the CEO and other management members, attending to the appropriateness of the reward schemes, preparing matters pertaining to the appointment of the CEO and other management members and identifying their potential successors, and the development of the remuneration of other personnel and the organisation.
The members of the Remuneration Committee were Jarmo Salmi, Jyrki Mäkynen and Aila Hemminki. The Remuneration Committee met two times during the financial year 2023.
The Shareholders' Nomination Committee convened five times during the financial year.
Raimo Härmä (Etelä-Karjala's Savings Bank Foundation)
Ari Lamminmäki (Parkano's Savings Bank Foundation)
Jouni Niuro (Lieto's Savings Bank Foundation)
Aino Lamminmäki (Töysä's Savings Bank Foundation)
Simo Haarajärvi (Kuortane's Savings Bank Foundation)
The CEO is appointed by the Board of Directors. Pasi Sydänlammi has been the Company's CEO since 2009. The CEO manages the Company, develops its business and is in charge of operative administration in accordance with the Board of Directors' instructions. The CEO presents matters to be dealt with and reports to the Board of Directors. The CEO oversees the Company's day-to-day administration in line with the Board of Directors' guidelines and sees to it that the accounts of the Company are in compliance with the law and that its financial affairs have been arranged in a reliable manner. If the CEO is prevented from carrying out his/her tasks, he/she is deputised by a person appointed by the Board of Directors. The CEO's deputy is Pasi Turtio, Head of Corporate Customer Business.
The Management Team is a decision-making body, whose areas of responsibility include operative administration, financial administration, ICT functions, business development, product and service entities, communications and control issues. The Management Team shall convene approximately every two weeks as summoned by the CEO. Minutes shall be kept of the meetings. The role of the Management Team is to assist the CEO. The Management Team comprises the CEO and other members appointed by the Board of Directors.
Oma Savings Bank Plc's shares owned by the Management Team and companies controlled by them on 31 December 2023
| Name | Shares |
|---|---|
| Pasi Sydänlammi | 121,435 |
| Pasi Turtio | 77,445 |
| Sarianna Liiri | 38,295 |
| Pekka Pykäri | 0 |
| Ville Rissanen | 19,055 |
| Minna Sillanpää | 27,043 |
| Hanna Sirkiä | 28 |
Chief Legal Officer Helena Juutilainen until 31 March 2023 Chief Risk Officer Pekka Pykäri from 1 December 2023
| Chief Information Officer | Ville Rissanen |
|---|---|
| Chief Communications Officer | Minna Sillanpää |
| Chief Legal Officer | Hanna Sirkiä from 1 April 2023 |
| Chief Risk Officer | Kimmo Tapionsalo until 30 November 2023 |
138 Annual Report 2023 Contents Contents OmaSp in Brief Sustainability Corporate Governance Corporate Governance Report of Board of Directors Financial Statements 139
Name Education Duty
Pasi Sydänlammi
b. 1974
M.Sc. (Admin), MBA, Harvard Business School Executive Education Advanced Management CEO
Sydänlammi has been the CEO of Oma Savings Bank since 2009. Sydänlammi has served as a representative of Töysän Savings Bank Foundation since 2009 and what before he was the CEO of Töysän Savings Bank 2007–2009. Previously he was the CEO of Lappajärven Osuuspankki 2005–2007, Bank Manager of Lammin Osuuspankki 2004–2005, Business Development Manager at Savings Banks' Union Coop 2002–2003, Management Consultant and Project Manager at Talent Partner Group 2001–2002 and Auditor at KPMG Oy Ab 2000–2001.
Pasi Turtio
b. 1974 Diploma in Agriculture
Deputy CEO, Head of Corporate Customer Business
Turtio has been OmaSp's Deputy CEO since 2009 and Head of Corporate Customer Business since December 2023. Turtio has served as OmaSp's Director of Customer Business in 2018–2023, Regional Director in 2014–2017 and Director in 2008–2014. Turtio has been the Managing Director of Kuortane Savings Bank Foundation since 2018, before which he acted as an agent for Kuortane Savings Bank Foundation 2017–2018. Previously, he was the bank manager of Lammin Osuuspankki from 2005 to 2006 and the Branch Manager from 2001 to 2005.
Sarianna Liiri b. 1981
M.Sc. (Business and Administration), eMBA
Chief Financial and Administrative Officer
Liiri has been the Chief Financial and Administrative Officer of Oma Savings Bank since 2018, prior to which she was the Administrative Officer 2015–2018 and Development Manager 2014–2015. Previously she was the Account Manager of South-Karelian Savings Bank 2006–2014.
Pekka Pykäri
b. 1987 M.Sc. (Business and Administration) Chief Risk Officer
Pykäri has been OmaSp's Chief Risk Officer since December 2023. Pykäri has worked as the CEO of Advisense Finland's companies (previously FCG Risk & Compliance) 2019–2023, as the Chief Risk Officer in POP Bank Group 2017–2019 and as Risk Manager 2016–2017 in POP Bank Group. He has also served as Supervisor of Regulatory Reporting in Nordea 2015–2016 and in a wide range of specialist positions in Nordea during 2011–2015.
Ville Rissanen
Aktia Bank Ltd 2004–2019 and as IT Director at Gyllenberg Private Bank Oy 2001–2004.
Minna Sillanpää b. 1970
foreign trade, CBM
Berner Oy 2000–2007, and Export Manager/ Division Manager at Berner Oy 1996–2000.
Hanna Sirkiä b. 1972
Government Official in various expert and legal positions.
Internal control refers to measures that ensure the achievement of strategic objectives, the efficiency of resources, the smooth running of information and the reliability of information. Internal control ensures that risk management is continuously adequate in various areas. Compliance with regulations and risk awareness are reflected in all decisionmaking and are part of corporate culture and responsible operations. Internal control also extends to ensuring compliance with business principles.
The Company's Board of Directors has overall responsibility for arranging internal control, and the Board regularly evaluates the effectiveness and efficiency of internal control based on the reporting of the compliance function, the independent risk assessment function and the internal audit. The principles of internal control approved by the Board of Directors outline the totality and objectives of the control system. The control principles are supplemented by function-specific control descriptions and guidelines.
In terms of financial reporting, the principles for internal control are clear roles and responsibilities within the organisation. As regards internal control, clear responsibilities between the Company and service providers and efficient procedures for monitoring processes are key. OmaSp has drawn up reporting practices for the implementation of financial reporting. In order to ensure the accuracy of financial reporting, internal control processes have been established.
The unit of Financial Administration is responsible for the financial reporting of the Oma Savings Bank Group as a whole and for external and internal accounting. Financial Administration is responsible for, among other things, the Group's financial reporting, the Group's accounting principles and maintenance thereof, drawing up and updating the Group's forecasting models, and the Company's internal financial reporting and its monitoring. The Group's reporting is centralised to Financial Administration.
The bookkeeping of OmaSp is handled by be reported.
Figure Taloushallinto Oy, which is partly owned by the Company. Purchased services include basic bookkeeping, drawing up the consolidated financial statements according to IFRS along with producing the numeric content for the notes to the financial statements, securities ledger and purchase ledger accounting, and fixed assets bookkeeping. Services are produced in accordance with service agreements, and they comply with the guidelines and regulations of the Finnish Financial Supervisory Authority and other authorities. The Company holds regular meetings with the service providers to develop the collaboration and monitor their operations. OmaSp's Management Team and the Board of Directors receive regular management reports, which cover reports for the period, forecasts, and analyses of deviations by earnings item and balance sheet item. The reporting framework also includes key figures that are to
Controllers involved in the Group's financial reporting do not participate in business activities or making business decisions. Controllers report to OmaSp's CFO, who is a member of the Management Team.
The Company has arranged functions that are independent of business operations to ensure efficient and comprehensive internal control as follows:
The Company's Board of Directors has appointed the persons in charge of these functions. In this way, the Board of Directors has ensured that the risk control function, compliance function, credit risk evaluation function and internal audit function have adequate and competent personnel resources with respect to the nature, scope and diversity of the Company's operations.
Risk control function is an essential part of internal control. The purpose of function is to ensure that risks arising from the Company's business are identified, assessed and quantified, and that the risks are monitored as part of day-to-day business management.
The Board of Directors approves the operating principles of the function, and the function reports on its activities to the Board of Directors and executive management. The Company maintains and develops risk control functions to ensure that all new, previously unidentified essential risks will be covered by risk management.
The compliance function assists the Board of Directors and executive management in managing risks related to non-compliance. The Board of Directors has adopted the goals and responsibilities of the function by approving its operating principles and confirming its annual plan each year.
The compliance function supervises and regularly assesses the adequacy and efficiency of all business areas' activities and procedures through which the Company ensures compliance with regulations. The function assesses and ensures that the procedures and instructions are appropriate with respect to legislation and the requirements arising from other regulations. The function evaluates the adequacy of the measures taken to rectify the deficiencies identified as regards compliance with regulations and the implementation of equal treatment of customers. The function works in co-operation with the internal audit and risk control functions and monitors the execution of the recommendations based on internal audit's observations.
The Compliance function reports to the Board of Directors on its observations biannually.
Internal audit refers to evaluation and assurance activities that are objective and independent of business operations.
The Board of Directors decides annually on the operating principles of the internal audit and the audit plan. The internal audit reports at least annually and, if necessary, more frequently on its most important findings, the follow-up of measures and the implementation of the audit plan directly to the Board.
Related parties refer to key management personnel in OmaSp and their family members, subsidiaries, associates and joint ventures, joint operations, and companies in which the key management personnel have control or significant influence and entities that have significant influence in OmaSp. The key personnel are the members of the Board of Directors, the CEO and the Deputy CEO, and the rest of the Management Team. Loans and guarantees granted to related parties are granted on terms and conditions that apply to similar customer loans and guarantees. Employee benefits are respected for related parties working in OmaSp. Transactions with related parties are part of the Company's normal business operations and are carried out in accordance with the agreed decision-making procedure and taking into account possible conflicts of interest. Related party transactions are reported in the notes to the financial statements (G31). According to the Articles of Association, at minimum one (1) and at maximum two (2) auditors shall be elected for the Company. The auditors shall be Authorised Public Accountants approved by Finland Chamber of Commerce. If only one auditor is elected and this is not from an authorised public accountants firm approved by Finland Chamber of Commerce, a deputy auditor shall also be elected. The auditor of OmaSp is the auditing firm KPMG Oy Ab (business ID 1805485-9), with Tuomas Ilveskoski, M.Sc., APA, as the auditor in charge in accordance with the decision of the Annual General Meeting in 2023. The auditor's term of office begins at the close of the Annual General Meeting and continues until the end of the next Annual General Meeting. The Company discloses the fees payable to the firm of auditors in the notes to the financial statements (G22).
Year 2023 Report of Board of Directors and Financial Statements is a translation of the original Finnish version "Vuoden 2023 hallituksen toimintakertomus ja tilinpäätös". If discrepancies occur, the Finnish version is dominant.
Oma Savings Bank Plc is nowadays the fastest growing in the Nordic countries and Finland's most profitable bank. Business focuses on retail banking and customers are provided 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. In addition, the Company engages in mortgage banking. Intermediated products include among other things credit, investment and loan insurance products.
Key customer groups are private customers, small and medium-sized companies as well as agricultural and forestry entrepreneurs. The goal is to strengthen the market position in the entire business area and among all the abovementioned customer groups. Growth is sought in business areas where growth is possible to be achieved while meeting the goals related to profitability and risk management. The Company has been one of the most profitable and effective banks in Finland already for years, and the aim is to maintain this position in the future as well. The development of business volumes is based on organic growth, but in line with its strategy, the Company is
also open to business arrangements. The core idea is to provide personal service and to be local and close to its customers, both in digital and traditional channels. The goal is a first-class customer experience through easy accessibility.
Special attention is paid to cost efficiency as well as comprehensive risk management. The business profile is stable as the Company focuses on retail banking in Finland. The aim is to keep individual customer and investment risk concentrations limited and organizational structure simple and transparent. The Company has defined precise risk management processes, risk taking limits and guidelines to stay within the set limits.
The personnel is committed and the aim is to support career development through versatile tasks and continuous development. About half of the personnel also own shares in the Company.
Salla Kakko, Olli Suominen and Karoliina Lipponen, Turku
The Company offers its private and corporate customers a full range of retail banking services and serves its customers through its branch network as well as through its comprehensive digital service channels. The offering to private customers covers daily banking services, various financing solutions, saving services, financial services, insurance, as well as inheritance and family law matters. The range of services to corporate customers covers payment services and other day-to-day banking and financial services for corporates, corporate pension insurance, investment services and legal and other advisory services. Own service offering has been complemented with services provided by partner companies.
Savings and investment product range includes, in addition to own products, such as accounts and Debenture loans, as well as the investment and savings products of the partners Sp-Fund Management Company Ltd and Sp-Life Insurance Ltd. At the end of 2023, the customers had EUR 942 million in fund and insurance savings brokered by the Company.
Own financial services are complemented by partner products such as loan insurances and various guarantees. Partners in offering these financial products include Sp-Life Insurance Ltd and Garantia Insurance Company Ltd. The Company operates as an independent issuer of Visa cards and finances the cards from its balance sheet.
In May, the Oma Savings Bank Plc and Svenska Handelsbanken AB agreed on an arrangement whereby the Company will acquire Handelsbanken's SME enterprise operations in Finland. The transaction is expected to be finalized during the second half of 2024. The exact date will be specified later. As part of the purchase of the SME enterprise operations, entrepreneurs' private banking services will also be transferred to the Company, excluding asset management and investment services. The SME enterprise operations to be purchased are geographically located all over Finland.
The size of the deposit base transferred to the Company is approximately EUR 1.2 billion and the lending volume is approximately EUR 460 million in the situation on 31 March 2023. The target of the business transaction is in total approximately 14,000 SME customers.
In addition, personal banking services of entrepreneurs will be transferred, which are not included in the above figures. At the same time, around 40 people from Handelsbanken will be transferred to the Company as old
employees.
With the arrangement the banks' market position will strengthen among SMEs in Finland. The growing business volumes will further improve the Company's cost efficiency and business profitability, and substantially strengthen the annual profit-making ability. The transferring deposit base will strengthen the Company's liquidity position, and there is no separate financing need for the business arrangement. The business deal has no material effect on the Company's capital adequacy. The purchase price is the net value of the balance sheet items to be transferred at closing plus EUR 15 million. The purchase price will be paid in cash, so the transaction has no impact on the number of Company's shares outstanding. Authority approval for the transaction was received on 24 July 2023.
At the turn of February and March, the Company carried out the acquisition of Liedon Savings Bank's banking business. The acquisition increased the Company's balance sheet by a total of EUR 1,448.0 million and the number of customers grew to more than 200,000 customers. The acquisition of the business is estimated to have a significant positive impact on the Company's annual profitability, and it is expected to increase the Company's profit before taxes by approximately EUR 15-20 million annually over the next few years. In the longer turn, business in the Turku economic area is expected to significantly increase the Company's earnings. The Company's branch network strengthened with nine new units located in the city of Turku and in Southwest Finland.
The Company's key aim is to serve its customers personally and to be local and close in both digital and traditional service channels. In line with the Company's strategy, the presence in growth centers is key. The investments continued to develop the service network and digital channels to ensure future competitiveness. With the expansion of the service network, customer premises in Southwest Finland and elsewhere in Finland were renovated to match the service model of the bank.
The Company's project of transitioning to the application of the IRB approach is progressing. In the first stage, the Company applies permission to apply an internal risk classification under the IRB approach to calculate capital requirements for retail credit risk liabilities. Later, the Company will apply for a similar permit for corporate liabilities as well as renewable retail liabilities. In February 2022, the Company has applied to the Finnish Financial Supervisory Authority (FIN-FSA) for the application of the IRB approach in capital adequacy, after which the application process has progressed on the basis of dialogue with the supervisor.
In addition, the Company has reform projects ongoing regarding regulatory reporting.
Personnel development and raising the level of competence are one of the Company's key focus areas. During the recent years, the Company has had an extensive training program going on, which aim is to clarify the Company's strategy and the organisational culture as well as to develop the work of the supervisors in a long-term and goal-oriented manner. In addition, continuous and regular training has been arranged to maintain competence level. In addition to regular trainings, the Company offers supervisors and experts the opportunity to complete e.g. APV1-, APV2-, APV ESG- and licensed real estate agent (LKV) qualification to improve their expertise. Investing in young employees continued also during the year 2023. Internships for university and vocational college students in different units were offered and several Bachelor's and Master's theses were prepared as part of various development projects. The Company was involved in the 2023 Responsible Summer Job campaign and offered 67 young people summer job opportunities.
The Company issued three bonds during the year. In February, a covered bond of EUR 350 million was issued, and a covered bond increase (tap issue) of EUR 250 million in April. A covered bond of EUR 250 million matured in April. In November, the Company issued a covered bond of EUR 500 million for the first time.
Finland's economy is in recession and, according to the Bank of Finland's forecast, the economy will only start to recover at the end of the year 2024. High interest rates and elevated prices as well as the uncertainty about the future are slowing down the growth. The notable reduction in investments also affects the recovery of the economy. (1 The year-on-year change in consumer prices calculated by Statistics Finland was 3.6% in December. The rise in inflation compared to a year ago was influenced, among other things, by the rise in the average interest rate on mortgages and the rise of interest rates on consumer loans. (3
Inflation has slowed down in recent months, but it is likely to pick up again temporarily in the near term. The European Central Bank is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. In December, the ECB decided to keep all the three key interest rates unchanged. Throughout the year, the ECB has raised the key interest rates by 1.0 percentage points. (2 Financial conditions in Finland have tightened during 2023 and, after the rise of the interest rates in the beginning of the year, the interest rates have turned to a slight decline at the end of the year. During January-December, the quotation of the 12-month Euribor rate has risen approximately by 0.2 percentage points. (11
Along with the rise in interest rates, the tightening of monetary policy, the rise in prices and weak export demand have influenced the economic growth in Finland. According to the preliminary calculations of the Bank of Finland, the GDP is predicted to decrease by 0.5% in 2023 and by 0.2% in 2024. In 2025, economic growth is projected to pick up to 1.5% and to 1.3% in 2026. (1
In July-September, the seasonally adjusted savings rate of households increased by 3.4% compared to the previous quarter. In the third quarter, the disposable income of households grew compared to the previous quarter and consumption expenditure remained at the level of the previous quarter. The disposable income of households grew by 8.5% and adjusted by price changes, income increased by 4.1% compared to the previous quarter one year ago.
The investment rate decreased slightly from the previous quarter and was 11.8%. Majority of the investments of households is directed in housing investments. The corporate investment rate remained at the level of the previous quarter and was 29.8%. (4
According to Statistics Finland, the number of employed people aged 15 to 74 was almost the same in December as one year ago and the number of unemployed persons was 12,000 higher than a year ago. In December 2023, the employment rate was 77.1% (20 to 64 years) and the average unemployment rate was 7.1%. (5
Consumer confidence indicator remained negative in December 2023, but rose slightly from the previous year. The components of the consumer confidence indicator are assessment of one's own economy now, expectations of one's own and Finland's economy 12 months from now, and intentions to spend money on durable goods in the next 12 months. Expectations about the current state of the consumer's own economy continued to weaken compared to a year ago, but expectations concerning current state of Finland's economy improved slightly. (12
According to Statistics Finland's preliminary data, prices of old dwellings in housing companies decreased in the whole country by 6.4% in 2023 from the previous year. Prices of old dwellings in housing companies fell most in Helsinki and Vantaa, where prices went down by 8.0% and in the rest of Finland by 4.8% compared to the previous year. At the same time, the number of sales of old dwellings in blocks of flats and terraced houses made through real estate agents decreased by 23% from the comparison period. (6
In December, mortgage withdrawals were made in total of EUR 1.3 billion, which is EUR 270 million more than in the previous year. (7 The demand for housing loans may have been positively affected by the government's decision to change the real estate transfer taxation law. (8 In December, the medium interest rate of new mortgages was 4.42%. In December 2023, the annual growth of all loans for households decreased by 1.3%. The volume of corporate loans rose 1.2% over the same period. Over the 12-month period, the number of household deposits reduced by a total of 2.8%. (7
In January-December 2023, the number of bankruptcies filed increased by 24.9% compared to the previous year. The number of bankruptcies has been increasing for several months and during 2023 enterprises that have filed for bankruptcy are more than during the financial crisis in 2009. (9
In September-November, the number of new building permits granted decreased by 17% compared to the previous year and was 6.6 million cubic meters. (10
The Company has continued its preparations for uncertainties of the economic operating environment by increasing buffers from both capital and liquidity and by increasing hedging operations among other things.
1) Bank of Finland, Finland's economy is in recession and the recovery will be slow. Published on 19 December 2023. 2) Bank of Finland, ECB monetary policy decisions. Published on 14 December 2023. 3) Statistics Finland, Inflation 3.6% in December 2023. Published on 15 January 2024. 4) Statistics Finland, Households' saving rate positive in the third quarter of 2023. Published on 18 December 2023. 5) Statistics Finland, Almost as many employed and more unemployed persons in December 2023 compared to one year ago. Published on 25 January 2024. 6) Statistics Finland, Prices of old dwellings in housing companies fell in the whole country in 2023. Published on 26 January 2024. 7) Bank of Finland, MFI balance sheet (loans
and deposits) and interest rates, Amount of non-performing loans in the construction sector has grown further. Published on 31 January 2024.
8) Bank of Finland, MFI balance sheet (loans and deposits) and interest rates, Housing loan drawdowns increased from a year earlier in November. Published on 4 January
2024.
9) Statistics Finland, In December 2023 more bankruptcies that during the financial crisis 2009. Published on 17 January 2024. 10) Statistics Finland, Cubic volume of building permits granted decreased in September to November 2023 by 17% year-on-year. Published on 23 January 2024. 11) Bank of Finland, Euribor interest rates tables. Published on 5 January 2024.
12) Statistic Finland, Consumer confidence low in December 2023 – concern for own financial situation and unemployment. Published on 27 December 2023.
156 Annual Report 2023 Contents Contents OmaSp in Brief Sustainability Corporate Governance Report of Board of Directors Report of Board of Directors Financial Statements 157
| (1,000 euros) | 1-12/2023 1-12/2022 | Δ % | |
|---|---|---|---|
| Net interest income | 197,045 | 104,930 | 88% |
| Total operating income | 247,067 | 144,392 | 71% |
| Total operating expenses | -90,550 | -73,062 | 24% |
| ¹⁾ Cost/income ratio, % | 36.9 % | 50.7 % | -27% |
| Impairment losses on financial assets, net | -17,126 | -1,747 | 881% |
| Profit before taxes | 138,048 | 69,226 | 99% |
| Profit/loss for the accounting period | 110,051 | 55,379 | 99% |
| Balance sheet total | 7,642,906 5,941,766 | 29% | |
| Equity | 541,052 | 364,961 | 48% |
| ¹⁾ Return on assets (ROA) % | 1.6 % | 1.0 % | 62% |
| ¹⁾ Return on equity (ROE) % | 24.3 % | 14.5 % | 68% |
| ¹⁾ Earnings per share (EPS), EUR | 3.49 | 1.85 | 89% |
| ¹⁾ Equity ratio % | 7.1% | 6.1% | 15% |
| ¹⁾ Total capital (TC) ratio % | 16.5% | 14.9% | 11% |
| ¹⁾ Common Equity Tier 1 (CET1) capital ratio % | 14.9% | 13.3% | 12% |
| ¹⁾ Tier 1 (T1) capital ratio % | 14.9% | 13.3% | 12% |
| ¹⁾ 2⁾ Liquidity coverage ratio (LCR) % | 248.9% | 159.9% | 56% |
| ¹⁾ 3⁾ Net Stable Funding Ratio (NSFR) % | 117.8% | 114.3% | 3% |
| Average number of employees | 445 | 352 | 26% |
| Employees at the end of the period | 464 | 357 | 30% |
| ¹⁾ Comparable profit before taxes | 143,609 | 75,850 | 89% |
|---|---|---|---|
| ¹⁾ Comparable cost/income ratio, % | 35.1% | 48.0% | -27% |
| ¹⁾ Comparable earnings per share (EPS), EUR | 3.63 | 2.02 | 79% |
| ¹⁾ Comparable return on equity (ROE) % | 25.3% | 15.8% | 60% |
1) The calculation principles of the key figures are presented in Note G37 of the Financial Statements. Comparable profit is presented in the Income Statement.
2) LCR calculation adjusted retrospectively as of 31 December 2022.
3) NSFR calculation adjusted retrospectively as of 31 December 2023.
The Group's profit before taxes for January-December was EUR 138.0 (69.2) million and the profit for the period was EUR 110.1 (55.4) million. The cost/income ratio was 36.9 (50.7)%.
Comparable profit before taxes in January-December amounted to EUR 143.6 (75.9) million and the comparable cost/income ratio was 35.1 (48.0)%. The comparable profit before taxes has been adjusted for the net income on financial assets and liabilities as well as oneoff items related to the acquisitions and the change negotiations.
Total operating income was EUR 247.1 (144.4) million. Total operating income increased 71.1% year-on-year. The increase can be explained by the strong growth of net interest income and fee and commission income.
Comparable total operating income was EUR 248.9 (149.7) million and the increase of comparable total operating income was 66.3%.
During the reporting period, net income on financial assets and liabilities of EUR -1.9 (-5.3) million has been eliminated from operating income as an item affecting comparability.
Net interest income grew 87.8%, totalling EUR 197.0 (104.9) million. During the reporting period, interest income grew 164.6% and was EUR 322.5 (121.9) million. The significant increase in interest income is explained by the impact of rising market interest rates and by the increased loan portfolio due to the acquisition of Liedon Savings Bank in March. Hedges to manage interest rate risk have also boosted interest income, the impact of these on interest income was EUR 37.6 (7.0) million. During the period, the average margin of the loan portfolio has remained almost unchanged.
Interest expenses increased significantly compared to the previous year to EUR 125.5 (16.9) million. The increase in interest expenses has been influenced by higher interest on issued bonds, due to the increase in the interest rate. Interest expenses have also been increased by the hedges related to the management of interest rate risk and their impact on interest expenses was EUR -41.7 (-2.7) million. The average interest on deposits paid to the Company's customers was 0.87% (0.20%) at the end of the period.
Fee and commission income and expenses (net) increased by 20.4% and was EUR 47.4 (39.4) million. The total amount of fee and commission income was EUR 56.6 (46.3) million.
39.4 Fee and commission income and expenses, net
-5.3 Net income on financial assets and financial liabilities
Commissions from cards and payment transactions net grew 37.9% compared to the comparison year and amounted to EUR 34.0 (24.4) million. The increase is mainly explained by volume growth. The amount of commission income on lending was EUR 10.2 (11.9) million. Commissions on lending decreased in the reporting period as new lending slowed down. Uncertainty in the economic environment has weakened credit demand in the market overall.
The net income on financial assets and liabilities was EUR -1.9 (-5.3) million during the period.
Other operating income was EUR 4.5 (5.4) million. Other operating income includes a deposit guarantee fee recorded during the reporting period of EUR 2.7 million and EUR 0.7 million from the revaluation of joint debt recorded in connection with the Eurajoen Savings Bank's business transaction. In the comparison period, EUR 1.3 million from the revaluation of the joint debt recognised in connection with the Eurajoen Savings Bank's business transaction was recorded in other operating income as well as a positive impact EUR 0.4. million caused by the change in the Group structure.
Operating expenses increased 23.9% compared to the previous year's corresponding period. Operating expenses came to a total of EUR 90.5 (73.1) million. For the reporting period, expenses affecting comparability have been recorded in relation to the acquisition of the Liedon Savings Bank's business and the acquisition to be acquired from Handelsbanken in total EUR 3.3 million. In the comparison period, operating expenses included costs of EUR 1.3 million arising from the acquisition of Liedon Savings Bank's business. Comparable operating expenses were EUR 86.9 (71.7) million. The increase of comparable operating expenses was 21.1%.
Personnel expenses increased 21.8%, totalling EUR 29.6 (24.3) million. The increase in personnel costs was impacted by the increased number of personnel as a result of the business arrangement with Liedon Savings Bank. The number of employees at the end of the period was 464 (357), of which 69 (62) were fixed-term.
Other operating expenses increased 27.5% to EUR 52.5 (41.2) million. Part of the increase in expenses is explained by the increase in authority fees due to the Company's growth. Other operating expenses item includes authority fees, office, IT, PR and marketing costs and those stemming from the business premises in own use. The increase in expenses compared to the comparison period was influenced by the increase in the number of personnel as well as the project costs related to business arrangements.
During the reporting period, a total of EUR 2.2 million has been recorded as a stabilization fee and a total of EUR 2.7 million as a deposit guarantee fee. The deposit guarantee fee will be covered by refunds from the old deposit guarantee fund. A total of EUR 5.0 (4.2) million was recorded as authority fees.
Depreciation, amortisation and impairment on tangible and intangible assets were EUR 8.4 (7.5) million.
Impairment losses of financial assets increased compared to the comparison year and were EUR -17.1 million, while the impairment losses of financial assets recorded in the comparison period were EUR -1.7 million. The growth was affected by the Company's preparedness for the uncertainty of the general economic situation and in advance made write-downs, of which the profit impact of an individual customer was EUR 5 million.
During January-December, the amount of expected credit losses decreased EUR 1.9 million targeting receivables from customers and off-balance sheet items. During the reporting period, expected credit losses amounted to EUR 10.6 million and an additional allowance of EUR 12.5 million based on management's judgement towards an individual customer was cancelled from the allowance as planned in connection with the final credit loss recognition. The net amount of realised credit losses increased compared to the comparison year and was EUR 19.0 (3.8) million in January-December. Of the realised credit losses, an individual customer accounted for EUR 13.8 million and the profit impact for the period was EUR -1.3 million.
During the reporting period, the Company updated its expected credit loss (ECL) calculation models, which had an impact of EUR 0.8 million. During the comparison period in 2022, the amount of expected credit losses as a result of model development decreased by EUR 2.6 million.
Based on the Company's assessment, the effects of the Russian invasion war remained limited on the Company's credit base, which is why the Company released EUR 0.9 million of the additional loss allowances related to the corona pandemic and the Russian invasion war during the first quarter.
In the first quarter, the receivables transferred in connection with the acquisition of Liedon Savings Bank's business were valued at fair value at the time of acquisition. EUR 8.0 million was recorded as a fair value adjustment based on the management's judgement. In the second quarter, the Company allocated a fair value adjustment of EUR 0.7 million to the receivables of the loans transferred in the business transaction. At the time of reporting, the Company has available EUR 7.3 million of fair value adjustment made to the receivable base.
In the last quarter, an additional allowance of EUR 1.0 million based on the management's judgement was recorded with which the Company continued to prepare for the uncertainty of the economic environment. At the end of the reporting period, based on the management's judgement, the Company has additional loss allowances and fair value adjustments recognised in the balance sheet in total EUR 8.3 million. The additional allowances are targeted to stage 2.
The Group's balance sheet total grew to EUR 7,642.9 (5,941.8) million during January-December 2023. The growth was 28.6%. Of the growth, EUR 1,448.0 million came from the acquisition of Liedon Savings Bank's business.
In total, loans and other receivables grew 27.1% to EUR 6,189.4 (4,868.7) million in January-December. The acquisition of Liedon Savings Bank's banking business increased loans and receivables by EUR 1,399.8 million.
The average size of loans issued over the past 12 months has been approximately EUR 128 thousand.
| Credit balance (1,000 euros) |
31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Private customers | 3,585,722 | 2,858,099 |
| Business customers 1,255,520 | 1,093,700 | |
| Housing associations |
736,068 | 461,339 |
| Agricultural customers |
300,447 | 271,112 |
| Other | 154,776 | 94,618 |
| Total | 6,032,533 | 4,778,869 |
The Group's investment assets increased 1.6% during the period, totalling EUR 561.4 (552.6) million. The primary purpose of managing investment assets is securing the Company's liquidity position.
At the end of the year, intangible assets and goodwill recorded in the balance sheet totalled EUR 13.6 (8.6) million. Goodwill was recognised from the acquisition of Liedon Savings Bank's banking business of EUR 4.4 million.
During the period, liabilities to credit institutions and to the public and public sector entities grew by 17.5% to EUR 3,943.6 (3,355.0) million.
The item consists mostly of deposits received from the public, which came to EUR 3,733.3 (3,113.9) million at the end of December. The impact of the acquisition of Liedon Savings Bank's banking business on the growth of the deposit portfolio was EUR 907.7 million.
Liabilities to the credit institutions were EUR 165.3 million (242.5 million).
Total debt securities issued to the public grew during the period by 40.4% to EUR 2,930.1 (2,087.0) million. The Company issued a covered bond of EUR 350 million in February and EUR 500 million in November. In addition to these, a EUR 250 million bond increase (tap issue) was issued in April. A covered bond of EUR 250 million matured in April. Debt securities issued to the public are shown in more detail in Note G13.
Covered bonds are secured by loans to the value of EUR 3,024.0 (2,100.1) million.
The Group's equity EUR 541.1 (365.0) million increased by 48.2% during the period. The change in equity is mainly explained by the strong result of the period, the change in the fair value reserve, the payment of dividends and the directed share issue.
In the first quarter, the Company carried out a paid directed share issue to Liedon Savings Bank. In the targeted issue, 3,125,049 shares were subscribed. A weighty reason for the directed issue was the development and expansion of the Company's banking operations into a new area through a business transaction. Share issue EUR 65.0 million was recorded in the Reserve for invested nonrestricted equity.
On 31 December 2023, the number of own shares held by Oma Savings Bank Plc was 201,386. In March, the Company transferred 29,461 shares held by the Company to persons entitled to the remuneration of the 2023 reward installment of the share incentive scheme 2020–2021.
Based on the authorisation given by the Annual General Meeting on 30 March 2023, the Company carried out a repurchase program related to the repurchase of its own shares in September-November. Shares were purchased to implement the share-based incentive scheme for key persons.
Off-balance-sheet commitments included commitments given to a third party on behalf of a customer and irrevocable commitments given to a customer. Commitments given to a third party on behalf of a customer, EUR 41.9 (34.8) million, were mostly made up of bank guarantees and other guarantees. Irrevocable commitments given to a customer, which totalled EUR 330.6 (291.2) million at the end of December, consisted mainly of undrawn credit facilities.
| Share capital | 31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Average number of shares (excluding own shares) |
31,546,596 | 29,990,687 |
| Number of shares at the end of the year (excluding own shares) |
33,073,851 | 30,019,341 |
| Number of own shares |
201,386 | 130,847 |
| Share capital (1,000 euros) |
24,000 | 24,000 |
The deposit guarantee is regulated by the Act on the Financial Stability Authority. The Financial Stability Authority is responsible for the guarantee. The Deposit Guarantee Fund protects the deposit maker's eligible receivables up to EUR 100,000.
The Investors' Compensation Fund covers compensation from Oma Savings Bank Plc to non-professional investors of a maximum of EUR 20,000.
Oma Savings Bank Plc has introduced a capital adequacy management process,
whose objective is to secure the Company's risk-bearing capacity relative to all substantial operational risks. To achieve this goal, the Company comprehensively identifies and evaluates the risks related to its operations and measures its risk-bearing capacity to correspond to the Company's total risks. To secure its capital adequacy, the Company sets risk-based equity objectives and creates an equity plan to reach those objectives. The objective of the capital adequacy management process is also to maintain and develop highquality risk management operations.
The internal capital needs, which are determined through the capital adequacy management process, are based on the capital requirements of solvency regulations, Pillar I, and its external risks, such as the interest rate risk of the financial account, the market risk of the investment portfolio and business risk.
In its internal evaluation process, the Company estimates the amount of capital sufficient to cover any unexpected losses emerging from risks that are external to Pillar I.
The Company's Board of Directors confirms the general requirements for the capital adequacy measurement and evaluation processes as well as general principles for the structuring of the capital adequacy management process. The Board confirms risk strategies and defines target levels for capital, which covers all essential risks emerging from business operations and changes in the external operating environment. The Company operates according to its strategy in retail banking. By restricting its operations to this sector alone, the Company is able to keep the risks involved in its operations manageable and small in terms of operational quality. The Company's Board of Directors is responsible for managing the Company's capital adequacy, which also defines the risk limits related to operations. Annually, the Board of Directors reviews the Company's capital adequacy management risks, the capital plans as well as the limits set for the risks.
The total capital (TC) ratio of Oma Savings Bank Group increased and was 16.5 (14.9)% at the end of the period. The Common Equity Tier 1 capital (CET1) ratio was 14.9 (13.3)%. The Company has confirmed a target level for the Common Equity Tier 1 capital ratio at least 2 percentage points above regulatory requirement in the medium-term. Riskweighted assets grew 29.6% to EUR 3,300.0 (2,546.5) million. Risk-weighted assets grew most significantly due to the acquisition of Liedon Savings Bank's business.
Oma Savings Bank Group applies in the capital requirement calculation for credit risk calculation the standardised approach and for operational risk the basic indicator approach. The capital requirement for market risk is calculated using the basic method for the currency position. The Company's project to transition to the application of the IRB approach is progressing as planned.
At the end of the review period, the capital structure of Oma Savings Bank Group was strong and consisted mostly of Common Equity Tier 1 capital (CET1). The Group's own funds (TC) EUR 544.5 (379.0) million exceeded by EUR 148.1 million the total capital requirement for own funds of EUR 396.5 (305.8) million. Tier 1 capital (T1) was EUR 490.9 (339.5) million consisting entirely of Common Equity Tier 1 capital (CET1) and Tier 2 capital (T2) was EUR 53.6 (39.5) million consisted of debenture loans. Own funds were most significantly increased by directed share issue of EUR 65.0 million to Liedon Savings Bank as well as retained earnings for the financial year 2023, which have been included in the Common Equity Tier 1 capital with the permission granted by the Finnish Financial Supervisory Authority (FIN-FSA) and the total of EUR 20 million debenture loan issued in February. Increase in fair value reserve EUR 14.7 million increased own funds.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Common Equity Tier 1 capital before regulatory adjustments | 505,611 | 348,692 |
| Regulatory adjustments on Common Equity Tier 1 | -14,663 | -9,204 |
| Common Equity Tier 1 (CET1) capital, total | 490,948 | 339,488 |
| Additional Tier 1 capital before regulatory adjustments | - | - |
| Regulatory adjustments on additional Tier 1 capital | - | - |
| Additional Tier 1 (AT1) capital, total | - | - |
| Tier 1 capital (T1 = CET1 + AT1), total | 490,948 | 339,488 |
| Tier 2 capital before regulatory adjustments | 53,571 | 40,000 |
| Regulatory adjustments on Tier 2 capital | - | -500 |
| Tier 2 (T2) capital, total | 53,571 | 39,500 |
| Total capital (TC = T1 + T2) / Total own funds | 544,519 | 378,988 |
| Risk-weighted assets | ||
| Credit and counterparty risk | 2,926,776 | 2,281,829 |
| Credit valuation adjustment risk (CVA) | 50,949 | 31,658 |
| Operational risk | 322,280 | 233,043 |
| Risk-weighted assets, total | 3,300,005 | 2,546,530 |
| Common Equity Tier 1 (CET1) capital ratio, % | 14.88% | 13.33% |
| Tier 1 (T1) capital ratio, % | 14.88% | 13.33% |
| Total capital (TC) ratio, % | 16.50% | 14.88% |
The total capital requirement for banks' own funds consists of the Pillar I minimum capital requirement (8.0%) and various buffer requirements. Buffer requirements are among others the capital conservation buffer set by the Credit Institution Act (2.5%), the discretionary SREP requirement according to Pillar II, the countercyclical buffer requirement, and the systematic risk buffer. consists of the Pillar I minimum capital requirement (8.0%) and various buffer requirements. Buffer requirements are among others the capital conservation buffer set by the Credit Institution Act (2.5%), the discretionary SREP requirement according to Pillar II, the countercyclical buffer requirement, and the systematic risk buffer.
In its decision on 27 February 2023, the Finnish Financial Supervisory Authority (FIN-FSA) maintained the SREP requirement for Oma Savings Bank Plc based on the supervisory authority's estimate at 1.5% unchanged. The decision is valid until further notice from 30 June 2023, but no later than 30 June 2026. SREP requirement is possible to be partially covered by Tier 1 capital and Tier 2 capital in addition to Common Equity Tier 1. According to the overall assessment based on risk indicators, there are no grounds for applying In its decision on 27 February 2023, the Finnish Financial Supervisory Authority (FIN-FSA) maintained the SREP requirement for Oma Savings Bank Plc based on the supervisory authority's estimate at 1.5% unchanged. The decision is valid until further notice from 30 June 2023, but no later than 30 June 2026. SREP requirement is possible to be partially covered by Tier 1 capital and Tier 2 capital in addition to Common Equity Tier 1. According to the overall assessment based on risk indicators, there are no
a countercyclical buffer, and thus the Finnish Financial Supervisory Authority (FIN-FSA) maintained the requirement of countercyclical buffer at its basic level of 0%. The total capital requirement for banks' own funds basic level of 0%.
Tier 2 capital before regulatory adjustments 53,571 40,000 Regulatory adjustments on Tier 2 capital - -500 Tier 2 (T2) capital, total 53,571 39,500 Total capital (TC = T1 + T2) / Total own funds 544,519 378,988
Credit and counterparty risk 2,926,776 2,281,829 Credit valuation adjustment risk (CVA) 50,949 31,658 Operational risk 322,280 233,043 Risk-weighted assets, total 3,300,005 2,546,530
Common Equity Tier 1 (CET1) capital ratio, % 14.88% 13.33% Tier 1 (T1) capital ratio, % 14.88% 13.33% Total capital (TC) ratio, % 16.50% 14.88%
On 30 March 2023, the Finnish Financial Supervisory Authority (FIN-FSA) imposed a systemic risk buffer requirement of 1.0% for Finnish credit institutions in order to strengthen the risk-bearing capacity of the banking sector. The decision enters into force after a transitional period on 1 April 2024 and shall be covered by Consolidated Common Equity. In October 2023, the Finnish Financial Supervisory Authority (FIN-FSA) set Oma Savings Bank Plc an indicative additional capital recommendation for own funds based on the Finnish Act on Credit Institutions. The indicative additional capital recommendation of 1.0% must be covered by Common Equity Tier 1 capital and the recommendation is valid until further notice as of 31 March 2024. Equity Tier 1 capital and the recommendation is valid until
| 31 Dec 2023 (1,000 euros) |
Buffer requirements | |||||||
|---|---|---|---|---|---|---|---|---|
| Pillar I minimum | Pillar II (SREP) capital |
Capital conservation |
Countercyclical | Systemic risk | ||||
| Capital | capital requirement* | requirement* | buffer | buffer** | O-SII | buffer Total capital requirement | ||
| CET1 | 4.50% | 0.84% | 2.50% | 0.01% | 0.00% | 0.00% | 7.86% | 259,299 |
| AT1 | 1.50% | 0.28% | 1.78% | 58,781 | ||||
| T2 | 2.00% | 0.38% | 2.38% | 78,375 | ||||
| Total | 8.00% | 1.50% | 2.50% | 0.01% | 0.00% | 0.00% | 12.01% | 396,455 |
* AT1 and T2 capital requirements are possible to fill with CET1 capital
**Taking into account the geographical distribution of the Group's exposures
At the end of the review period, Oma Savings Bank Group's leverage ratio was 6.3 (5.6)% while the binding requirement of the capital adequacy regulation was 3%. The leverage ratio is calculated based on valid regulations and describes the ratio of the company's Tier 1 capital to the total exposures. The Company monitors excessive leverage as part of its capital adequacy management process. An internal minimum target level has been set for the Group's leverage ratio as part of risk budgeting included in the overall risk strategy.
In October 2023, the Finnish Financial Supervisory Authority (FIN-FSA) set Oma Savings Bank Plc an indicative additional capital requirement based on the Finnish Act on Credit Institutions. The discretionary additional capital requirement of 0.25% for the leverage ratio (Pillar II) must be covered by Tier 1 capital and the requirement is valid until further notice as of 31 March 2024, but no later than 31 March 2026.
| Leverage ratio (1, 000 euros) |
31 Dec 2023 |
31 Dec 2022 |
|---|---|---|
| Tier 1 capital | 490,948 | 339,488 |
| Total amount of exposures |
7,749,639 | 6,093,644 |
| Leverage ratio, % | 6,34% | 5,57% |
The Group's liquidity coverage ratio (LCR) remained good, coming to 248.9 (159.9)% at the end of the period, when the minimum LCR is 100%.
The invasion war against Ukraine, initiated by Russia in 2022, has led to global sanctions against Russia and Belarus and increased tensions between the major powers. The inflation that started in 2021 and accelerated due to the sanctions of the invasion war has forced the central bank to raise its key interest rate, whereby the interest rate has remained at a high level until the end of 2023. However, in the last quarter of the year, market interest rates turned downwards as inflation expectations eased. However, inflationary pressures will remain at a higher level than normal as a result of low unemployment and increased wage levels, so interest rates will likely continue to fluctuate widely during 2024. Prolonged inflation and high interest rates are reflected in increased uncertainty, especially in the refinancing market. The increased interest rate, on the other hand, can be seen as increasing costs of market-based financing. Despite the increasing costs, the availability of financing has remained at a good level.
The Company's liquidity has remained at a stable level despite the overall uncertainty of the economy. In addition, issued covered bonds have strengthened the Company's liquidity and decreased the risk of refinancing. The issuance of the bonds took place under the Company's EUR 3 billion bond program.
The net stable funding ratio (NSFR) was 117.8 (114.3)% at the end of the period with a minimum requirement of 100%. The NSFR key figure has risen with new issues. In addition, the Company's financial plan for the coming years will also support NSFR's development in the future.
Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms was implemented in Finland as of 1 January 2015 (Act on the Resolution of Credit Institutions and Investment Firms). For the implementation of this Act, the Financial Stability Authority was established (Act on the Financial Stability Authority 1195/2014), which approved the Company's resolution plan for the first time in December 2017.
The Financial Stability Authority has issued a decision to Oma Savings Bank Plc on the Minimum Requirement for Own Funds and
| LCR & NSFR | 31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| LCR* | 248.9% | 159.9% |
| NSFR* | 117.8% | 114.3% |
*LCR and NSFR calculation retrospectively adjusted as of 31 December 2022
Eligible Liabilities requirement (MREL) within the meaning of Chapter 8, Section 7 of the Resolution Act (1194/2014) on 6 April 2022. The requirement under the decision consists of an overall risk-based requirement (9.5%) and a requirement based on the total amount of liabilities used to calculate the leverage ratio (3%). MREL requirements must be fully met as of 30 June 2022. On 31 December 2023, Oma Savings Bank Plc meets the set requirement
with own funds.
The objective of risk management is to ensure that the risks stemming from the Company's operations have been identified, evaluated and scaled to an acceptable level, that the risks are monitored and that they are commensurate with the Company's ability to bear risk. The essential areas of risk management are credit risks, market risks including interest rate and price risks, financing risks, property risks as well as strategic and operational risks. The Company monitors the interdependence of various risks on a risk map. Oma Savings Bank Plc complies with its disclosure obligation by publishing information of risks, their management and capital adequacy in its financial statements. In addition, the Company publishes a Capital and Risk Management Report as a separate document to the Financial
Statements.
Risk management means the identification, assessment, measurement, restriction and monitoring of risks resulting from and closely related to business operations. Through risk management, the Company attempts to minimise the likelihood of unexpected losses and threats to the Company's reputation. Risk management perspectives are also involved in business decisions when assessing new business opportunities and areas and the ratio of risk to return. Oma Savings Bank Plc's risk management strategy is based on the goal and business strategy approved by the Board of Directors for the Company, the risk appetite, the risk management policy and instructions, the authorisation system and the risk and incident reporting generated from the most important business areas. In accordance with its strategy, the Company operates in the low-risk area of retail banking activities. The Company does not have too much customer or investment risk concentrations in relation to its financial capacity, nor does the Company take them in accordance with its strategy.
The Company's Board sets the level of risk appetite by approving risk area-specific risk strategies and the necessary risk limits and monitoring limits. The realisation of the risk strategy is monitored through the control of risk limits and monitoring limits and reporting, which are performed independently of business operations. The Company maintains its capital adequacy at a safe level. The Company's capital adequacy and risk bearing ability are fortified with profitable
operations. The Board is regularly provided with information about the various risks to the Company as well as an assessment of the level of each risk. The Board also accepts authorisations and frameworks for risk-taking by determining the approved levels of credit and market risks.
Within the limits of authorisation, the responsibility for the daily risk monitoring and surveillance belongs to the executive management. The executive management utilises system-produced reports on the various areas of risk. Systems and policies intended for risk reporting and monitoring meet the requirements set for risk management, taking into consideration the character and extent of the Company's operations.
The Company has established independent operations to ensure efficient and comprehensive internal control.
Risk control and independent monitoring of compliance with regulations are performed by the risk control function and the Company's compliance function. The risk control function maintains the operating principles and framework of risk management and promotes a healthy risk culture by supporting the business in its risk management. The purpose of independent risk control is to ensure and monitor that the Company's risk management
is conducted on a sufficient level in terms of the quality, extent, diversity and risks of the Company's business operations. In addition, all new and essential previously unknown risks will be included in the Company's risk management.
The compliance function ensures that the Company complies with laws, regulations and internal guidelines in all its operations. The compliance function also ensures that the practices followed, and the Company's internal instructions are coordinated with the requirements of legislation and other regulations. The goal of the compliance function is to promote the Company's compliance culture. The risk control function and the compliance function report directly to the CEO.
Oma Savings Bank Plc's internal audit is an independent and objective assessment and assurance activity, the task of which is to check the adequacy, functionality and efficiency of the internal control system, risk management and management and governance processes in the Company's various units and functions.
Internal audit supports the Company's top management and the organization in achieving its goals by providing a systematic approach to the organisation's processes and providing added value to Oma Savings Bank Plc and improving its operational reliability.
S&P Global Ratings confirmed a credit rating of BBB+ for Oma Savings Bank Plc's long-term borrowing in June 2023, as well as a rating of A-2 for short-term borrowing. The long-term credit rating outlook has been confirmed as stable. In addition, S&P Global Ratings has confirmed the AAA rating for the Company's bond program.
In accordance with Regulation (EU) No 575/2013 of the European Parliament and the Council, Oma Savings Bank Group publishes information on capital adequacy and risk management listed in Part 8 and its Supplementary Regulation (EU) 2019/876 annually in Capital and Risk Management Report. In connection with the half-year report, the information according to Pillar III is published as a separate report in essential parts. The Company's independent operations evaluate and authenticate the relevance of the published information. The Company's Board of Directors assesses, on the proposal of independent operations, whether the published information provides market participants with a comprehensive understanding of the Company's risk profile.
Oma Savings Bank Plc's Annual General Meeting was held on 30 March 2023. The AGM confirmed the Company's Financial Statements and Consolidated Financial Statements for the 2022 financial year, granted discharge to the members of the Company's Board of Directors and CEO from liability, and approved the Company's remuneration report. In addition, the AGM decided on the following matters:
In accordance with the Board's proposal, the AGM decided to pay an actual dividend of EUR 0.40 per share for each share entitled to a dividend for the financial year 2022. The dividend shall be paid to shareholders registered in the register of shareholders of the Company maintained by Euroclear Finland Ltd on the record date of 3 April 2023.
The AGM decided, in accordance with the proposal of the Shareholders' Nomination Committee, to keep the remuneration of the members of the Board of Directors unchanged. The members of the Board of Directors are paid the following annual fees for the term ending at the AGM of 2024: EUR 55,000 per year for the Chairman of the Board of Directors, EUR 41,250 per year for the Vice Chairman and EUR 27,500 per year for the other members. In addition, a meeting fees of EUR 1,000 is paid for each Board meeting and EUR 500 for each single-issue email meeting and committee meeting.
A condition for obtaining and paying a fixed annual fee is that the Board Member commits to purchase Oma Savings Bank Plc shares amounting to 40% of the fixed annual remuneration on the regulated market (Nasdaq Helsinki Ltd) at a price determined by trading. The recommendation is that a member of the Board of Directors shall not transfer the shares awarded as annual remuneration until the membership in the Board has expired.
The number of members of the Board of Directors was confirmed to be seven. Aila Hemminki, Aki Jaskari, Timo Kokkala, Jyrki Mäkynen, Jarmo Salmi and Jaana Sandström were re-elected as Board members and Jaakko Ossa was elected as a new member for a term ending at the end of the 2024 AGM.
KPMG Oy Ab, a firm of authorised public accountants, was elected to continue as auditor for a term ending at the AGM 2024. M.Sc (Econ.), APA Tuomas Ilveskoski continues as responsible auditor. The auditor's remuneration is paid against an invoice approved by the
Company.
Authorisation of the Board of Directors to resolve on a share issue, the transfer of own shares and the issuance of special rights entitling to shares
The AGM decided, in accordance with the Board of Directors' proposal, to authorise the Board of Directors to resolve on the issuance of shares or transfer of the Company's shares and the issuance of special rights entitled to shares as referred to in Chapter 10, Section 1 of the Finnish Companies Act, subject to the following conditions:
The authorisation is valid until the end of the next AGM, but not later than 30 June 2024 and revokes previous authorisations given by the AGM to decide on a share issue, as well as the option rights and the issuance of special rights entitling to shares.
The AGM decided, in accordance with the Board of Directors' proposal, to authorise the Board of Directors to decide on the repurchase of the Company's own shares with funds belonging to the Company's free equity under the following conditions:
The authorisation is valid until the closing of the next AGM, but not later than 30 June 2024.
Oma Savings Bank Plc's Board of Directors consists of seven members. The Board of Directors convened 16 times during the year, of which five were email meetings.
Member Aki Jaskari
Oma Savings Bank Plc Group employed an average of 445 people in 2023. The goal of the Company is that every employee has a clear role in the organisation as well as adequate responsibilities and tasks.
The Company invests extensively in developing the skills and abilities of its personnel. The training and development of personnel with various themes in the form of training sessions, webinars and online trainings are the Company's continuous development of competence and professional skills.
The Company's personnel is generally very satisfied and committed. A significant portion of the Company's personnel own Company shares. Personnel satisfaction is a key indicator for the Company's operations and success. The Company monitors personnel satisfaction through an annual personnel survey. The overall satisfaction was at an excellent level of 4.5/5 in December 2023.
The Company's corporate governance principles are described in a separate document 'Oma Savings Bank Plc's Corporate Governance Statement', approved by the Board, which can be found on the Company's website.
The Company complies with the requirements on reward schemes laid down in Section 8 of the Act on Credit Institutions. The Company's Board of Directors has approved the general principles concerning the reward schemes and supervises and assesses their functioning and compliance with them regularly.
The reward scheme is aligned with the Company's business strategy, goals and values, and the Company's long-term benefit. The goal of the reward scheme is to assist the Company in achieving its strategic and operative targets by keeping the personnel motivated and committed. Remuneration also impacts work satisfaction, work well-being and commitment. The reward scheme is also in line with the Company's good and efficient risk management and risk-bearing capacity and promotes these.
One of the forms of reward is the personnel fund. The personnel fund means a fund owned and managed by the Company's personnel, the purpose of which is to manage earnings and profit bonuses paid into it by the company and other assets in accordance with the Act on Personnel Funds. The purpose of the personnel fund is to reward the whole personnel for achieving goals, improve the Company's productivity and competitiveness and promote co-operation between the employer and the personnel and financial participation of the personnel. The Company's Board of Directors decides annually on the amount of the profit-sharing bonus to be distributed to
the personnel fund and the objectives behind the distribution. All employees that have been working at Oma Savings Bank for six months, excluding the CEO and the members of the
management team, become members of the personnel fund. The personnel fund rules determine how the bonus gets distributed to the personnel fund members. The operation of the personnel fund is regulated by the Act on Personnel Funds. During the financial year, the Company had a performance period of the share-based incentive scheme for the years 2022-2023. The aim of the scheme is to combine the interests of owners and key persons in order to increase
the value of the Company in the long term,
the Company's strategy, objectives and
and to commit the key persons to implement long-term interest and to provide them with competitive earnings of the Company's shares
and a remuneration scheme based on accrual. The terms of the share-based incentive system follow the principles of variable remuneration presented in the Company's remuneration policy. The persons belonging to the systems do not have other variable remuneration reward systems during the earning period.
The system's target group includes a maximum of 30 key personnel, including the ompany's CEO and members of the management team. The fees payable under the scheme corresponds to a maximum value of 400,000 shares of Oma Savings Bank Plc, including the
amount to be paid in cash.
The share incentive scheme established in February 2020 (2020-2021) had one twoyear earning period. In February 2023, the Company's Board of Directors approved 29,461 shares for payment from the incentive system, including the portion to be paid in cash. The system's target group included 10 key personnel.
Salaries and rewards for the financial year are presented in Note G21 Personnel expenses. The Company publishes the Remuneration Report alongside the Financial Statements.
As of 29 March 2019, Oma Savings Bank's auditor has been the auditing firm KPMG Oy Ab. M.Sc., APA Tuomas Ilveskoski, has acted as the chief auditor during the financial year.
The Company has reported on sustainability since 2019. In 2020, reporting expanded and included the review of the Company's environmental impacts through its carbon footprint in accordance with the GHG Protocol standard. Since 2022, the sustainability program and report have been prepared in accordance with the principles of GRI standards. The current reporting will deepen and promote sustainability work to meet the increasingly stringent sustainability requirements in advance and prepare for the reporting requirements of future CSRD regulation.
The Company's sustainability work is based on values and business principles, stakeholder expectations and megatrends that affect operations, on the basis of which the three most important sustainability themes have been defined we are close and present to the people, we promote shared well-being and we promote sustainable development.
The Company builds sustainable economy and promotes mitigating and adapting to climate change. The Company's products and services are developed to encourage customers to take sustainable and environmentally friendly action. The Company aims to plan its operations to be as low carbon as possible in order to reduce the total carbon footprint of the Company.
The corporate sustainability report is published as part of the Company's annual report and also includes a survey of the effects and risks of climate change and a carbon footprint result of the company's actual operations. The report examines the impact of activities on the environment, people and society in accordance with the duty of care and materiality.
In January, the Company's Shareholders' Nomination Committee proposes the Annual General Meeting the number of Board members to be further confirmed at seven. The Shareholders' Nomination Committee proposes that the Board members Aila Hemminki, Aki Jaskari, Jyrki Mäkynen, Jaakko Ossa, Jarmo Salmi and Jaana Sandström to be re-elected and as a new member Essi Kautonen.
Other events following the end of the reporting period that would require the presentation of additional information or that would materially affect the Company's financial position are unknown.
The Company's profitable growth will continue, driven by investments in customer experience and service network. The SME customer business to be acquired from Handelsbanken will improve the Company's profitability from the second half of 2024 onwards.
Oma Savings Bank Plc provides earnings guidance on comparable profit before taxes for 2024. A verbal description is used to make a comparison with the comparative 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.
We estimate the Group's comparable profit before taxes to remain at the current excellent level in the financial year 2024 (comparable profit before taxes was EUR 143.6 million in financial year 2023).
Oma Savings Bank's Board of Directors has approved the following financial goals:
The Company aims to pay a steady and growing dividend, at least 20 percent of net income. The Company's Board of Directors assesses the balance between the dividend or capital return to be distributed and the amount of own funds required by the Company's solvency requirements and target on an annual basis and makes a proposal on the amount of dividend or capital return to be distributed.
The Board of Directors proposes that, based on the Financial Statements to be approved for 2023, an actual dividend of EUR 0.67 and an additional dividend of EUR 0.33, i.e. total of EUR 1.00 to be paid from the Parent Company's distributable profits for each share entitled to a dividend for 2023. The actual dividend is in line with the Company's dividend policy and an additional dividend is proposed due to the record result for the financial year 2023 and exceptionally strong Net interest income. The proposed record date for dividends would be 28 March 2024 and payment date 8 April 2024.
No significant changes took place in the Company's financial position after the financial year. The Company's liquidity is good, and the proposed profit distribution does not compromise the Company's liquidity according to the Board of Directors' insight.
Oma Savings Bank Plc's Annual General Meeting will be held on 26 March 2024. The Company's Board of Directors will convene the Annual General Meeting separately.
Year 2023 Report of Board of Directors and Financial Statements is a translation of the original Finnish version "Vuoden 2023 hallituksen toimintakertomus ja tilinpäätös". If discrepancies occur, the Finnish version is dominant.
This is not the ESEF Financial Statements, the official ESEF Financial Statements can be read on the Company's website.
| G1 Accounting principles for the Consolidated Financial Statements |
198 |
|---|---|
| G2 Risk management notes | 211 |
| G3 Classification of financial assets and liabilities |
224 |
| G4 Cash and cash equivalents | 225 |
| G5 Loans and other receivables | 225 |
| G6 Financial derivatives | 226 |
| G7 Investment assets | 227 |
| G8 Intangible assets and goodwill | 230 |
| G9 Tangible assets | 231 |
| G10 Other assets | 232 |
| G11 Tax assets and liabilities | 233 |
| G12 Liabilities to the public and public sector entities and liabilities to credit institutions |
234 |
| G13 Debt securities issued to the public | 235 |
| G14 Subordinated liabilities | 236 |
| G15 Provisions and other liabilities | 237 |
| G16 Equity | 238 |
| G17 Net interest income | 240 |
| G18 Fee and commission income and expenses |
241 |
| G19 Net income on financial assets and financial liabilities |
242 |
| G20 Other operating income | 242 |
|---|---|
| G21 Personnel expenses | 242 |
| G22 Other operating expenses | 243 |
| G23 Depreciation, amortisation and impairment losses and tangible and intangible assets |
243 |
| G24 Impairment losses on financial assets | 244 |
| G25 Income taxes | 245 |
| G26 Guarantees granted and received | 246 |
| G27 Off-balance sheet commitment | 246 |
| G28 Pension liability | 247 |
| G29 Offsetting financial assets and financial liabilities |
249 |
| G30 Fair values in accordance with the valuation method |
250 |
| G31 Management compensation and related party transactions |
253 |
| G32 Share-based incentive scheme | 254 |
| G33 Leases | 255 |
| G34 Entities and changes in the Group structure included in the Consolidated Financial Statements |
256 |
| G35 Business acquisitions | 257 |
| G36 Significant events after the period | 259 |
| G37 Alternative Performance Measures (APM) and calculation of key figures |
260 |
| Note | (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|---|
| Interest income | 322,506 | 121,876 | |
| Interest expenses | -125,461 | -16,946 | |
| G17 Net interest income | 197,045 | 104,930 | |
| Fee and commission income | 56,621 | 46,270 | |
| Fee and commission expenses | -9,200 | -6,873 | |
| G18 Fee and commission income and expenses, net | 47,421 | 39,396 | |
| G19 Net income on financial assets and financial liabilities | -1,875 | -5,306 | |
| G20 Other operating income | 4,476 | 5,371 | |
| Total operating income | 247,067 | 144,392 | |
| G21 Personnel expenses | -29,611 | -24,316 | |
| G22 Other operating expenses | -52,517 | -41,203 | |
| G23 Depreciation, amortisations and impairment losses on tangible | |||
| and intangible assets | -8,422 | -7,543 | |
| Total operating expenses | -90,550 | -73,062 | |
| G24 Impairment losses on financial assets, net | -17,126 | -1,747 | |
| Share of profit of equity accounted entities | -1,344 | -357 | |
| Profit before taxes | 138,048 | 69,226 | |
| G25 Income taxes | -27,997 | -13,847 | |
| Profit for the accounting period | 110,051 | 55,379 | |
| Of which: | |||
| Shareholders of Oma Savings Bank Plc | 110,051 | 55,382 | |
| Non-controlling interest | - | -2 | |
| Total | 110,051 | 55,379 | |
| Earnings per share (EPS), EUR | 3.49 | 1.85 | |
| Earnings per share (EPS) after dilution, EUR | 3.47 | 1.83 | |
| Consolidated Income statement | |
|---|---|
| Profit before taxes excluding items affecting comparability |
192 |
| Consolidated Statement of comprehensive income |
193 |
| Consolidated Balance sheet | 194 | |
|---|---|---|
| Consolidated Statement of changes in equity 196 | ||
| Consolidated Cash flow statement | 197 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Profit before taxes | 138,048 | 69,226 |
| Operating income: | ||
| Net income on financial assets and liabilities | 1,875 | 5,306 |
| Operating expenses | ||
| Costs relating to business combinations | 3,292 | 1,318 |
| Expenses from the change negotiations | 394 | - |
| Comparable profit before taxes | 143,609 | 75,850 |
| Income taxes in income statement | -27,997 | -13,847 |
| Change of deferred taxes | -1,112 | -1,325 |
| Comparable profit/loss for the accounting period | 114,500 | 60,679 |
| Note (1,000 euros) | 1-12/2023 1-12/2022 | ||
|---|---|---|---|
| Profit for the accounting period | 110,051 | 55,379 | |
| Other comprehensive income before taxes | |||
| Items that will not be reclassified through profit or loss | |||
| G28 | Gains and losses on remeasurements from defined benefit pension plans |
191 | 364 |
| Items that may later be reclassified through profit or loss | |||
| G16 | Measured at fair value | 18,012 | -94,917 |
| G16 | Transferred to Income Statement as a reclassification change | 422 | -97 |
| Other comprehensive income before taxes | 18,624 | -94,650 | |
| Income taxes | |||
| For items that will not be reclassified to profit or loss | |||
| Gains and losses on remeasurements from defined benefit pension plans |
-38 | -73 | |
| Items that may later be reclassified to profit or loss | |||
| Measured at fair value | -3,687 | 19,003 | |
| G11 Income taxes | -3,725 | 18,930 | |
| Other comprehensive income for the accounting period after taxes | 14,899 | -75,720 | |
| Comprehensive income for the accounting period | 124,950 | -20,340 | |
| Attributable to: | |||
| Shareholders of Oma Savings Bank Plc | 124,950 | -20,338 | |
| Non-controlling interest | - | -2 | |
| Total | 124,950 | -20,340 |
| otal | |
|---|---|
| Non-controlling interest | |
| Shareholders of Oma Savings Bank Plc |
| Note Assets (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| G4 Cash and cash equivalents | 682,117 | 402,030 |
| G5 Loans and receivables from credit institutions | 192,305 | 114,655 |
| G5 Loans and receivables from public and public sector entities | 5,997,074 | 4,754,036 |
| G6 Financial derivatives | 44,924 | 1,931 |
| G7 Investment assets | 561,414 | 552,633 |
| G34 Equity accounted entities | 24,131 | 25,351 |
| G8 Intangible assets | 8,801 | 8,174 |
| G8 Goodwill | 4,837 | 454 |
| G9 Tangible assets | 34,594 | 28,799 |
| G10 Other assets | 75,097 | 31,778 |
| G11 Deferred tax assets | 17,610 | 21,924 |
| Total assets | 7,642,906 | 5,941,766 |
| Note Liabilities (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| G12 Liabilities to credit institutions | 165,255 | 242,543 |
| G12 Liabilities to the public and public sector entities | 3,778,310 | 3,112,464 |
| G6 Financial derivatives | 9,455 | 4,184 |
| G13 Debt securities issued to the public | 2,930,058 | 2,086,950 |
| G14 Subordinated liabilities | 60,000 | 40,000 |
| G15 Provisions and other liabilities | 113,297 | 54,111 |
| G11 Deferred tax liabilities | 42,899 | 36,072 |
| G11 Current income tax liabilities | 2,580 | 482 |
| Total liabilities | 7,101,854 | 5,576,806 |
| G16 Equity | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Share capital | 24,000 | 24,000 |
| Reserves | 148,822 | 68,822 |
| Retained earnings | 368,230 | 272,139 |
| Shareholders of Oma Savings Bank Plc | 541,052 | 364,961 |
| Shareholders of Oma Savings Bank Plc | 541,052 | 364,961 |
| Equity, total | 541,052 | 364,961 |
| Total liabilities and equity | 7,642,906 | 5,941,766 |
| Group's off-balance sheet commitments (1,000 euros) | 31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Off-balance sheet commitments | ||
| Guarantees and pledges | 41,926 | 34,774 |
| Commitments given to a third party on behalf of a customer | 41,926 | 34,774 |
| Undrawn credit facilities | 330,599 | 291,184 |
| Irrevocable commitments given in favour of a customer | 330,599 | 291,184 |
Group's off-balance sheet commitments, total 372,525 325,958
| Consolidated financial statements | Group's notes | Parent company's financial statements | Parent company's notes | Signatures | Audit report | ||||
|---|---|---|---|---|---|---|---|---|---|
| 194 | Annual Report 2023 | Contents | OmaSp in Brief | Sustainability | Corporate Governance | Report of Board of Directors | Financial Statements | 195 |
| (1,000 euros) Equity, 1 January 2023 |
Share capital 24,000 |
Fair value reserve -76,503 |
Other reserves 145,324 |
Reserves, total 68,822 |
Retained earnings 272,139 |
Shareholders of Oma Savings Bank Plc 364,961 |
Non controlling - |
interest Equity, total 364,961 |
|---|---|---|---|---|---|---|---|---|
| Comprehensive income | ||||||||
| Profit for the accounting period | - | - | - | - | 110,051 | 110,051 | - | 110,051 |
| Other comprehensive income | - | 14,747 | - | 14,747 | 153 | 14,899 | - | 14,899 |
| Total comprehensive income | - | 14,747 | - | 14,747 | 110,204 | 124,950 | - | 124,950 |
| Transactions with owners | ||||||||
| Share issue | - | - | 65,001 | 65,001 | - | 65,001 | - | 65,001 |
| Repurchase of own shares | - | - | - | - | -1,556 | -1,556 | - | -1,556 |
| Distribution of dividends | - | - | - | - | -13,270 | -13,270 | - | -13,270 |
| Share-based incentive scheme | - | - | - | - | 552 | 552 | - | 552 |
| Other changes | - | - | 252 | 252 | 162 | 414 | - | 414 |
| Transactions with owners, total | - | - | 65,253 | 65,253 | -14,112 | 51,141 | - | 51,141 |
| Equity total, 31 December 2023 | 24,000 | -61,756 | 210,578 | 148,822 | 368,230 | 541,052 | - | 541,052 |
| (1,000 euros) | Share capital |
Fair value reserve |
Other reserves |
Reserves, total |
Retained earnings |
Shareholders of Oma Savings Bank Plc |
Non controlling |
interest Equity, total |
|---|---|---|---|---|---|---|---|---|
| Equity, 1 January 2022 | 24,000 | -492 | 145,324 | 144,833 | 231,939 | 400,772 | 522 | 401,294 |
| Comprehensive income | ||||||||
| Profit for the accounting period | - | - | - | - | 55,382 | 55,382 | -2 | 55,379 |
| Other comprehensive income | - | -76,011 | - | -76,011 | 291 | -75,720 | - | -75,720 |
| Total comprehensive income | - | -76,011 | - | -76,011 | 55,673 | -20,338 | -2 | -20,340 |
| Transactions with owners | ||||||||
| Share issue | - | - | - | - | - | - | - | - |
| Repurchase of own shares | - | - | - | - | 880 | 880 | - | 880 |
| Distribution of dividends | - | - | - | - | -15,010 | -15,010 | - | -15,010 |
| Share-based incentive scheme | - | - | - | - | -1,381 | -1,381 | - | -1,381 |
| Other changes | - | - | - | - | 37 | 37 | -520 | -482 |
| Transactions with owners, total | - | - | - | - | -15,473 | -15,473 | -520 | -15,993 |
| Equity total, 31 December 2022 | 24,000 | -76,503 | 145,324 | 68,822 | 272,139 | 364,961 | - | 364,961 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit/loss for the accounting period | 110,051 | 55,379 |
| Changes in fair value | 2,104 | 414 |
| Share of profit of equity accounted entities | 1,344 | 357 |
| Depreciation and impairment losses on investment properties | 59 | 41 |
| Depreciation, amortisation and impairment losses on tangible and intangible assets |
8,422 | 7,543 |
| Gains and losses on sales of tangible and intangible assets | - | -273 |
| Impairment and expected credit losses | 17,126 | 1,747 |
| Income taxes | 27,997 | 13,847 |
| Other adjustments | 9,446 | -21,329 |
| Adjustments to the profit/loss of the accounting period | 66,498 | 2,346 |
| Cash flow from operations before changes in receivables and liabilities | 176,549 | 57,725 |
| Increase (-) or decrease (+) in operating assets | ||
| Debt securities | 58,741 | -17,330 |
| Loans and receivables from credit institutions | 45,052 | -1,391 |
| Loans and receivables from customers | -254,038 | -460,913 |
| Derivatives, in hedge accounting | 246 | 114 |
| Investment assets | -758 | 10,463 |
| Other assets | -37,101 | 14,502 |
| Total | -187,859 | -454,556 |
| Increase (+) or decrease (-) in operating liabilities | ||
| Liabilities to credit institutions | -288,103 | 57,953 |
| Deposits | -289,309 | 218,242 |
| Provisions and other liabilities | 28,639 | 11,131 |
| Total | -548,773 | 287,326 |
| Paid income taxes | -17,796 | -15,679 |
| Total cash flow from operating activities | -577,879 | -125,184 |
| Cash flow from investments | ||
| Investments in tangible and intangible assets | -6,559 | -3,554 |
| Proceeds from sales of tangible and intangible assets | - | 742 |
| Acquisition of associated companies and joint ventures | -3,270 | -1,500 |
| Changes in other investments | - | 246 |
| Total cash flow from investments | -9,829 | -4,066 |
| Cash flows from financing activities | ||
| Other cash increases in equity items | 252 | - |
| Repurchase of own shares | -2,054 | -367 |
| Subordinated liabilities, changes | 20,000 | 25,000 |
| Debt securities issued to the public | 832,413 | 353,049 |
| Acquisition of businesses less cash at the time of acquisition | 143,071 | -28 |
| Payments of lease liabilities | -3,442 | -2,517 |
| Dividends paid | -13,270 | -15,010 |
| Total cash flows from financing activities | 976,971 | 360,128 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit/loss for the accounting period | 110,051 | 55,379 |
| Changes in fair value | 2,104 | 414 |
| Share of profit of equity accounted entities | 1,344 | 357 |
| Depreciation and impairment losses on investment properties | 59 | 41 |
| Depreciation, amortisation and impairment losses on tangible and | ||
| intangible assets | 8,422 | 7,543 |
| Gains and losses on sales of tangible and intangible assets | - | -273 |
| Impairment and expected credit losses | 17,126 | 1,747 |
| Income taxes | 27,997 | 13,847 |
| Other adjustments | 9,446 | -21,329 |
| Adjustments to the profit/loss of the accounting period | 66,498 | 2,346 |
| Cash flow from operations before changes in receivables and liabilities | 176,549 | 57,725 |
| Increase (-) or decrease (+) in operating assets | ||
| Debt securities | 58,741 | -17,330 |
| Loans and receivables from credit institutions | 45,052 | -1,391 |
| Loans and receivables from customers | -254,038 | -460,913 |
| Derivatives, in hedge accounting | 246 | 114 |
| Investment assets | -758 | 10,463 |
| Other assets | -37,101 | 14,502 |
| Total | -187,859 | -454,556 |
| Increase (+) or decrease (-) in operating liabilities | ||
| Liabilities to credit institutions | -288,103 | 57,953 |
| Deposits | -289,309 | 218,242 |
| Provisions and other liabilities | 28,639 | 11,131 |
| Total | -548,773 | 287,326 |
| Paid income taxes | -17,796 | -15,679 |
| Total cash flow from operating activities | -577,879 | -125,184 |
| Cash flow from investments | ||
| Investments in tangible and intangible assets | -6,559 | -3,554 |
| Proceeds from sales of tangible and intangible assets | - | 742 |
| Acquisition of associated companies and joint ventures | -3,270 | -1,500 |
| Changes in other investments | - | 246 |
| Total cash flow from investments | -9,829 | -4,066 |
| Cash flows from financing activities | ||
| Other cash increases in equity items Repurchase of own shares |
252 -2,054 |
- -367 |
| Subordinated liabilities, changes | 20,000 | 25,000 |
| Debt securities issued to the public | 832,413 | 353,049 |
| Acquisition of businesses less cash at the time of acquisition | 143,071 | -28 |
| Payments of lease liabilities | -3,442 | -2,517 |
| Dividends paid | -13,270 | -15,010 |
| Total cash flows from financing activities | 976,971 | 360,128 |
| Net change in cash and cash equivalents | 389,262 | 230,878 |
| Cash and cash equivalents at the beginning of the accounting period | 484,660 | 253,782 |
| Cash and cash equivalents at the end of the accounting period | 873,923 | 484,660 |
| Cash and cash equivalents are formed by the following items | ||
| Cash and cash equivalents | 682,117 | 402,030 |
| Receivables from credit institutions repayable on demand | 191,805 | 82,630 |
| Total | 873,923 | 484,660 |
| Received interest | 290,255 | 110,342 |
| Paid interest | -101,834 | -10,848 |
| Dividends received | 179 | 449 |
Oma Savings Bank Plc is a Finnish public limited Company, whose domicile is in Seinäjoki and head office in Lappeenranta, Valtakatu 32, 53100 Lappeenranta. The Group's parent company is Oma Savings Bank Plc. Copies of the Financial Statements and Interim Reports are available on the Bank's website www.omasp.fi.
The Board of Directors has approved the Operating Report and Financial Statements for the period from 1 January to 31 December 2023 at its meeting 29 February 2024, and the Annual General Meeting will approve them on 26 March 2024.
Oma Savings Bank Group is formed as follows:
• Real estate company Lappeenrannan Säästökeskus holding 100%
• Housing company Seinäjoen Oma Savings Bank house holding 30.5%
The Consolidated Financial Statements of Oma Savings Bank Plc (hereinafter Company) have been prepared in compliance with the International Financial Reporting Standards (IFRS), and in accordance with SIC and IFRIC interpretations. The preparation of the Notes to the Financial Statements took into account also the Finnish
accounting and entity legislation and the supplementary requirements of authorities' requirements.
The Consolidated Financial Statements (hereinafter Group) are presented in thousands of euros unless otherwise specified. The figures in the notes are rounded off, so the combined sum of single figures may deviate from the grand total presented in a table or a calculation. The accounting and functional currency of the Group and its companies is the euro. The Consolidated Financial Statements can also be signed electronically.
The Group's Consolidated Financial Statements have been prepared on a historical cost basis, except for financial assets recognised at fair value through profit or loss, financial assets held for trading, fair value hedges (for hedged risk) and hedging derivatives used in fair value or cash flow hedges that are recognised at fair value.
The Company has applied the standard amendments and interpretations concerning the Company that came into force during the financial year. The changes that took effect in 2023 have not had a material effect on the Group's result for the financial year, financial position or presentation of Financial Statements.
The Group's Consolidated Financial Statements include the parent company and its subsidiaries in which the bank has control. Control arises when the Group, by participating in an entity, is exposed to, or is entitled to a variable return on an investee and is able to exercise that return by exercising its power over the investee.
Mutual ownership in the Group has been eliminated using the acquisition method. The consideration transferred, the identifiable assets of the acquired entity and liabilities taken for liability are valued at fair value at the time of acquisition. Any goodwill shall be recorded in the amount by which the cost exceeds the Group's share of the fair value of acquired assets and liabilities at the time of acquisition. The costs related to the acquisition have been recorded as expenses. The non-controlling owners share is valued at an amount equal to the non-controlling owners´ share of the identifiable net assets of the subject of the acquisition. If the consideration given undercuts identifiable assets and liabilities taken for liability, negative goodwill arises due to low-cost trading, recorded in the Income Statement under Other operating income.
The acquired subsidiaries are included in the Consolidated Financial Statements from the moment that the Group gains control over them and the sold subsidiaries are included until control ceases. Internal transactions, receivables and liabilities, unrealised profits and internal profit distribution in the Group have been eliminated in the Consolidated Financial Statements.
Unrealised losses are not eliminated if the loss is due to impairment. The distribution of profit or loss for the period to the controlling and non-controlling interests of the parent company is disclosed separately in the income statement. The distribution of comprehensive income for the period to the controlling and non-controlling interests of the parent company is presented in the statement of comprehensive income. Profit or loss for the period and comprehensive income are allocated to the controlling and non-controlling interests of the parent company, even if this were to result in the non-controlling interest becoming negative. The share of equity belonging to non-controlling
interest is presented as a separate item in the balance sheet, as part of equity.
Joint ventures are defined as joint arrangements in which the bank has joint control together with other parties to the arrangement and the arrangement brings the bank the right to the arrangement's net assets. Joint ventures and associated companies have been consolidated using the equity method. The investment is initially recognised at cost, after which the Group's share of the profit of the joint venture for the period is consolidated in the income statement. Similarly, the potential Group's share of other comprehensive income of the joint venture or associate company is recognised in the Group's comprehensive income. If the Group's share of the losses exceeds the book value of the investment to be consolidated using the equity method, any losses exceeding the book value will be consolidated with the Group if the Group is committed to meeting the obligations of the associated companies.
A joint venture is an arrangement in which the Group has rights to the arrangement of net assets, while in a joint operation, the Group has rights to the assets and liabilities of arrangement. Mutual real estate companies are joint operations from which the Group has combined its own assets, liabilities, income and expenses and its own share of common assets, liabilities, income and expenses.
Goodwill arising from the combination of business operations is recognised in the amount by which the combined amount of transferred consideration, noncontrolling interest in the acquired item and the previously owned share exceeds the fair value of the acquired net assets. The difference in the fair value of the acquired net assets is recognised as goodwill or negative goodwill. Goodwill is recorded in the balance sheet under intangible assets, while negative goodwill is recognised directly as income.
No depreciation is recognised in goodwill, but it is tested in case of impairment at least on every reporting day and whenever there is any indication that the value may have
decreased. Goodwill is valued at the initial acquisition value less impairment.
On initial recognition, the item belonging to financial assets is valued at fair value in accordance with IFRS 9. If the financial asset is an item not recognised at fair value through profit or loss, the incremental direct transaction costs from the acquisition of the assets are added to it or deducted from it.
Financial assets are classified in one of the three following classes when they are initially recognised:
Immediately subsequent to the initial recognition, a loss allowance concerning expected credit losses (ECL) is recognised on the financial assets, if the financial asset is valued at amortised cost or at fair value through other comprehensive income. Impairments of financial assets are assessed for each receivable and receivable category. Impairments that cannot be allocated to individual receivables are recognised as impairments of a receivable category.
The classification and valuation of financial assets is based on the Company's business model and the nature of contractual cash flows. Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
Financial assets are valued at amortised cost when the contractual cash flows only include capital repayments and interest payments, and the Company holds them as part of a business model whose objective is to collect contractual cash flows over the life of the contract. Financial assets valued at amortised cost include receivables from customers and credit institutions, as well as cash assets.
Financial assets are valued at fair value through other comprehensive income when the contractual cash flows consist only of capital repayments and interest payments and the Company holds the financial asset as part of a business model whose objective is both collecting contractual cash flows and possibly selling the financial assets before the maturity date. The Company has classified some of its debt instruments to be valued at fair value through other comprehensive income.
Financial assets are valued at fair value through profit or loss unless they are valued at amortised cost or at fair value through other comprehensive income. Items that do not meet the SPPI test are also recognised at fair value through profit or loss. Mainly financial assets whose business model is to trade actively, and which have been acquired to generate earnings in the short term, are recognised at fair value through profit or loss. The Company has classified some of its debt securities in this class.
Equity instruments are recognised at fair value through profit or loss unless the Company makes an irrevocable choice at the time of acquisition to measure the investment at fair value through other comprehensive income.
The Group does not have equity investments valued at fair value through other comprehensive income. All equity instruments recognised according to IFRS 9 are recognised at fair value through profit and loss.
The Company specifies the business model objective for each portfolio according to how business operations are managed and reported to the management. The objectives are specified on the basis of the investment and lending policy approved by the Company.
The business model describes a portfolio-specific earnings model with the purpose of collecting only contractual cash flows, collecting contractual cash flows and cash flows
from sales of financial assets or collecting cash flows from trading in financial assets.
If the business model is other than trading, the Company assesses whether the contractual cash flows are based solely on payment of principal and interest (the so called SPPI test). If the cash flow criterion is not met, the financial asset is recognised at fair value through profit or loss.
In assessing whether contractual cash flows are solely payments of principal and interest, the Company will consider the contractual terms of the instrument. This will include assessing whether the financial asset contains a contractual term that could change the timing or amount of cash flows so that it does not meet the SPPI contractual cash flow characteristics test requirements.
The retail bank and corporate loans granted by the Company contain a prepayment feature. This feature does meet the cash flow testing criteria as, in connection with a prematurely repaid loan, the Company is entitled to collect reasonable compensation for the premature termination of the contract.
Whenever a change is made to a financial asset or liability valued at amortised cost without removing the asset or liability from the balance sheet any profit or loss must be recognised. The profit or loss is calculated as the difference between the original contractual cash flows and the modified cash flows discounted at the contractual interest rate. An example of a situation of this kind are changes made to the amortisation plan for a loan granted to the customer or granting amortisation suspension. Changes due to a deterioration in the customers solvency are treated as a significant growth in credit risk.
In connection with significant loan term changes, the loan is derecognised from the balance sheet and a new loan is recognised in its place. If the credit risk of the loan derecognised from the balance sheet has grown significantly, the new loan is recognised in the balance sheet as credit-impaired.
The Group derecognises a financial asset when the contractual rights to cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group does not retain control of the financial assets.
The impairment estimate, the expected credit loss (ECL), is recognised on all debt instruments belonging to financial assets valued at amortised cost and valued at fair value through the fair value reserve and on off-balance sheet loan commitments and guarantee contracts.
For financial assets valued at amortised cost, a loss allowance for the expected credit loss is recognised in a separate account as a reduction in the carrying amount. The expected credit loss on the financial assets valued at fair value through other comprehensive income is recognised in the fair value reserve through other comprehensive income. For off-balance-sheet items, the expected credit loss is recognised as a provision.
The expected credit losses are measured at an amount equal to lifetime of the financial asset when, on the date of reporting, the credit risk related to the financial asset has significantly increased since its initial recognition (stage 2) or when the contract is credit-impaired (stage 3). Otherwise, the expected credit loss is calculated based on the assessment that default event will occur within 12 months of the date of reporting.
The expected credit losses are recognised for each date of reporting, and they describe:
The financial assets used in the calculations are classified into three stages, which describe the weakening of the quality of the financial assets compared to the initial recognition.
Stage 1: Contracts whose credit risk has not grown since the initial recognition and for which a 12-month ECL is calculated.
Stage 2: Contracts whose credit risk has grown significantly since the initial recognition and for which a lifetime ECL is calculated.
Stage 3: Credit-impaired contracts (contract has been classified as being in default) for which a lifetime ECL is calculated.
In assessing whether the credit risk related to a financial instrument has increased significantly, the change in the risk of a default occurring over the expected life of the financial instrument shall be observed. When carrying out this assessment, the risk of default occurring over the expected life of the instrument at the reporting date is compared with the risk of default at the date of initial recognition. A significant increase in credit risk leads to the transfer of the loan from stage 1 to stage 2. The Company uses both quantitative and qualitative indicators in credit risk assessment.
As indicators to assess a significant increase in credit risk, the Company uses, among other things, changes in the rating of customers. In addition to classifications, the Company uses certain qualitative indicators, such as forbearance marking, as well as a delay of at least 30 days of contractual payments. This review is automated in the calculation.
Loan-specific stage allocations are monitored monthly. The loan can improve at most one step per calculation date. Loans from stage 2 are transferred to stage 1 only after a delay period. With a loan at stage 2, improvement to stage 1 requires at least two consecutive months in which the loan does not meet the criteria of stage 2 or 3. This means that the loan is always at least two months in stage 2, regardless of whether it is a loan improved from stage 3, which has not met the stage 2 or 3 criteria at any stage after improvement, or which has met the criteria for
stage 2 or initially in stage 2 been a loan that would be entering stage 1.
The Company has determined that the default under IFRS 9 (stage 3) occurred when the debtor's contract has been defaulted. The definition corresponds with the definition of default used by the Group in its regulatory reporting and is consistent with the definition of customer default. A debtor is default when the aggregate amount of its overdue credit obligations exceeds both of the thresholds listed below. All receivables due at the overall level are taken into account, regardless of maturity.
Once both thresholds have been met for 90 consecutive days, the customer is classified as defaulted. The other criterion of uncertain repayment may also result in customer default if it is likely that the customer will not repay their credit obligation in full without resorting to collateral liquidation.
In assessing when a debtor is in a state of default, the Company takes into account qualitative indicators such as violations of loan terms or covenants and quantitative indicators such as the number of days past due date, by using internal and external sources to collect information on the debtor's financial position.
The calculation of the expected credit losses is based on portfolio-specific calculation rules. The Group's loan portfolio has been divided into the following calculation portfolios:
The calculation of the expected credit loss for each portfolio is based on the Exposure at Default (EAD), Probability of Default (PD) and the Loss Given Default (LGD). As a basis for determining the parameters, the Company uses customers' historical payment behavior and customer data, as well as liability and collateral values. In the forward-looking determination on values of the PD variables and the LGD variables, Finland's macroeconomic forecasts of changes regarding the future development of the economy, i.e. the change in GDP, the development of housing price and the number of employees, have been used.
The portfolios of private customers and SME customers make up the two clearly largest calculation portfolios. Private customers' portfolio includes liabilities for which the PD value has been modeled using the private customer classification method included in the IRB license application. The portfolio of SME customers includes all corporate liabilities for which the PD value is modeled using the SME classification method. If the PD value cannot be calculated for the liability using the two methods mentioned above, the portfolio of the liability is determined according to the customer's sector and industry code.
For other agricultural entrepreneurs, the PD value is determined by the average default frequency calculated from the history of the agribusiness counterparties. For other housing companies, the principle of calculation is similar. The remaining counterparties go to the "Other" portfolio and use values calculated from the average PDs of Phase 1 and 2 of the SME counterparties.
Certain financial instruments include both a loan principal and an undrawn portion of a loan commitment. The undrawn portion of a loan is taken into account in the exposures for the total limit granted. With credit card receivables, EAD calculation applies the so-called CCF coefficient when taking into account undrawn limits. The Exposure at Default (EAD) of LGD describes expected share of credit loss from the loan capital at the time of default.
For debt security investments, the Group determines the allowance for credit loss using the formula EAD*PD*LGD. Instrument-specific material from the market database is used as the source for calculating PDs. In addition, the low
credit risk exemption is applied for debt security investments with a credit rating of at least investment grade at the reporting date. The investment grade level is the highest possible rating level that debt security investments can receive from credit rating agencies and therefore the low credit risk exemption may apply to such investments. In these cases, the allowance for credit loss will be measured at an amount equal to the 12-month expected credit losses.
The management of the Company monitors the development of an allowance for credit loss to ensure that the model properly reflects the amount of expected credit loss. If necessary, the management refines the calculation parameters.
Financial assets are derecognised from the balance sheet when it is expected that payment on the loans will no longer be received and the final credit loss can be calculated. The previously recognised expected credit loss is reversed at the same time as the item is removed from the balance sheet and the final credit loss is recognised.
The loans are removed from the balance sheet when their enforcement activities have been finished or when the loan terms are changed significantly, for example in connection with refinancing. After derecognition, payments allocated to recoveries of amounts previously written off are recognised through profit or loss in the item 'Impairment losses on financial assets, net'.
At the time of the initial recognition, financial liabilities are classified in one of the following classes:
Financing liabilities are originally recognised at fair value. Consequently, financial liabilities, with the exception of liabilities recognised at fair value through profit and loss, are valued at amortised cost using the effective interest method. Transaction costs are included in the original carrying value of financial liabilities valued at amortised cost. Transaction costs related to financial liabilities that are recognised at fair value through profit or loss are recognised as expenses.
Financial liabilities valued at fair value through profit or loss comprise derivative instruments. At the reporting date, the Group does not have derivative instruments valued at fair value through profit or loss. In addition, joint debts included in other liabilities in connection with the acquisitions of the Group's businesses, are recognised at fair value through profit or loss.
Liabilities to credit institutions, liabilities to the public and general government as well as debt securities issued to the public are recognised in other financial liabilities valued at amortised cost.
Financial liabilities are not reclassified subsequent to their initial recognition.
Financial assets have not been netted in the Group's financial statements.
Assets and liabilities denominated in foreign currencies outside of the euro zone have been translated into to euros as per the European Central Bank's average rate on the reporting date. On the income statement, foreign currency differencies that arising from during valuation have been recognised in net gains from investment operations.
Cash and cash equivalents consist of cash, bank receivables and short-term deposits of less than three months.
Fair value is the price that would be received for the sale of an asset or that would be paid for assuming a liability between market participants in a common transaction occurring on the valuation date.
The fair value of a financial instrument is determined either utilising quoted prices obtained from active markets or, if active markets do not exist, utilising an established valuation method. Markets are considered to be active if price quotes are easily and regularly available and if they reflect real and regularly reoccurring market transactions between parties that are independent of each other. The
current bid price is used as the quoted market price of financial assets.
If there is an established valuation method in the markets for financial instruments for which a market price cannot be directly acquired, the fair value is based on the generally used calculation model of market price and on the input quotes used by the model.
If the valuation method is not well-established in the markets, a specific widely recognised valuation model for the product in question is used to determine the market value. Valuation models are based on widely utilized calculation methods and they cover all factors that market participants would take into consideration when calculating prices. When determining the fair value, uses observable prices of market transactions, discounted cash flows and the fair value at the time of financial statements of another, essentially similar instrument. Valuation methods take into account credit risk assessments, used discount rates, the possibility of prepayments and other factors that impact the valuation of the financial instrument's fair value.
The fair value determination according to the IFRS 13 standard is applied to the determination of the fair value of financial instruments. The fair values of financial instruments are divided in three hierarchies according to how the fair value is determined:
Level 1: Fair values quoted in active markets for identical assets or liabilities.
Level 2: Fair values that have been determined by the use of input information other than quoted in Level 1 prices, that are verifiable for assets or liabilities either directly (e.g. as prices) or indirectly (e.g. derived from prices). Level 3: Fair values that have been determined for assets or liabilities using inputs that are not essentially based on verifiable market prices.
The hierarchy levels of fair values are determined based on the lowest level of input that is significant for the investee. The significance of an input is assessed against the item valued at fair value in its entirety. Transfers between fair value hierarchy levels are determined to have occurred on the date when the event or change in circumstances occurs.
The Company hedges the interest rate risk of changes in the value of debt certificates and fixed-rate deposit stock with interest rate derivatives and applies hedge accounting to them. In hedge accounting documentation, hedge accounting is defined as fair value hedge. The Company follows the hedge accounting specifications and monitors the effectiveness of hedges and changes in fair values on a regular basis. In addition, at the balance sheet date, the Company has share derivatives to hedge deposits whose return is tied to a change in the value of the shares.
The change in the value of debt certificates and their impact on the fair value reserve of the Company are protected by interest rate swaps. The hedge accounting follows the provision of IFRS 9, which allows continued application of the portfolio hedge accounting in accordance with IAS 39.
Interest rate swaps are used to hedge fixed-rate deposit stocks and stock derivatives have been used to hedge deposits, whose yield is tied to changes in stock value. For hedge accounting, the hedge is subject to the IAS 39 'carve out' method. The individual terms of the ISDA/CSA collateral methods are applied to the counterparties of the interest rate swaps.
In determining the fair values of derivative contracts, the Company follows hierarchy levels 2 and 3 of the fair values of financial instruments presented in section 4.11 Determining the fair value. Derivative contracts are valued at fair value and changes in value are recorded in profit or loss or if hedge accounting is applied to other comprehensive income items. The positive fair values of derivative contracts are presented in the assets of the balance sheet under the item 'Derivatives'. The counterparty's credit risk adjustment (CVA) is taken into account when valuing the assets.
The negative fair values of derivative contracts are presented in the balance sheet's liabilities under the 'Derivative contracts' item. The debit valuation adjustment (DVA) is taken into account in the valuation. Derivative contracts are valued at fair value and hedge accounting is applied to them. The changes in the fair value of hedged items and hedging instruments designated for hedging the
fair value are entered in the income statement item 'Net income on financial assets and liabilities' and in the balance sheet as an adjustment of the item in question. The interest expenses of hedge derivatives are presented under interest expenses and the income under interest income.
The fair values of discontinued hedging calculation derivatives are amortised over the period to the original maturity.
Derivatives are not held for the purpose of trading. Before beginning hedge accounting, the connection between hedging derivatives and instruments to be hedged (economic hedge relationship) and the effectiveness of hedging are documented.
The most significant intangible assets in the Consolidated Financial Statements are the information systems used in the banking operations and intangible assets related to customer relationships recognised in the balance sheet in connection with acquisitions.
Intangible assets are recognised in the balance sheet if it is likely that the expected economic benefits associated with the asset will flow to the Group and the acquisition cost of the asset can be measured reliably.
The acquisition cost comprises the purchase price including expenditure that are direct results of preparing the asset for its intended purpose. Internal development work related directly to the information system project is also in the carrying amount of the asset. Expenses related to the use of the asset and the training of personnel are not included in the acquisition cost, nor are administrative expenses or other general expenses. After initial recognition, the intangible asset is measured at cost less amortisation and impairments.
Intangible assets are recognised in the balance sheet under 'Intangible assets' and any amortisation is recognised on the income statement under 'Depreciation, amortisation and impairment losses on tangible and intangible assets'.
The acquisition cost of intangible assets is recognised as depreciation in accordance with useful life. Depreciations of intangible assets are commenced at the moment when the asset is ready for use. The useful life of intangible assets is reviewed annually.
The accounting for cloud computing arrangements depends on whether cloud-based software is classified as a software intangible asset or a service contract. Those arrangements where the Company does not have control over the underlying software are accounted as service contracts providing the Company the right to access the cloud provider's application software over the contract period. The ongoing licensing fees to the application software, together with related configuration or customisation cost incurred, are recognised under Other operating expenses when the services are received. Prepayments paid to the cloud vendor customizing services which are not distinct are recognised over the contract period.
Based on the purpose of use, the Group's properties are divided into properties in own use and investment properties. The purpose of investment properties is to generate rental income or increases in capital value. If a property is both in own and investment use, the assets are presented separately only if they can be sold separately. In these cases, the division is based on the ratio of square meters in different uses.
If these parts could be sold separately, they are processed separately in bookkeeping by the purpose of use. If the parts cannot be sold separately, the property is treated as investment property only if merely a small portion of the property is in own or the personnel's use. If the parts cannot be sold separately, the premises are classified as per the purpose of use of the larger area in use.
Property, plant and equipment are recognised in the balance sheet under 'Tangible assets' and investment properties are recognised under 'Investment assets'. On the income statement, income related to properties in own use is recognised under 'Other operating income' and the related expenses are recognised under 'Other operating expenses'. Depreciation and impairment losses from all property, plant and equipment are recognised under 'Depreciation, amortisation and impairment losses from tangible and intangible assets'. Net income from investment properties, including accumulated depreciation, amortisation and impairment, are included in 'Net income from investment activities'. Gains or losses arising from disposal or retirement are recognised as a difference between received income and balance sheet value.
Property, plant and equipment as well as investment properties are valued at acquisition cost less depreciation and impairment. Depreciations are based on estimates on the assets' useful lives. Depreciations are not made for land areas. Subsequent expenditure on asset is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates, or the economic life is extended. The estimated useful lives are primarily as follows:
Leases in which the Group functions as a lessee are recognised in the balance sheet as lease liability and as a right-of-use asset. The right-of-use assets recognised in the Group's balance sheet are related to the leases on properties, flats and machines and equipment.
At the commencement date of the lease, the right-of-use asset is valued at acquisition cost, which includes an initial amount of lease liability and any initial direct costs and an estimate of costs to dismantle and any rents paid by the commencement date of the lease, minus received incentives. The lease term of a lease agreement is defined as a period during which the agreement cannot be terminated. A period including a possible extension or
termination option is added to the lease term, if it is relatively certain that the Group will exercise the extension option or not use the termination option. The leases of the Company's branches are valid until further notice and have a duration of approximately five years. Lease terms for lease agreements, other than those valid until further notice, are between 3 to 15 years.
After the start of the agreement, the Group values the fixed asset in accordance with the acquisition cost model. Depreciation and interest expenses related to lease liabilities are recognised in the fixed asset item. Depreciation is recognised in the period between the date of commencement of the contract and the end of the economic life of the fixed asset or the end of the lease term.
The lease liability is initially measured at the present value the rents to be paid during the lease term, which have not yet been paid. Leases are discounted at using the interest rate implicit in the lease or the Group's incremental borrowing rate. When a variable lease is based on the index or price, these are taken into account in determining the lease liability. Subsequently the lease liability is measured using the effective interest method. Rents consist of fixed payments and variable lease payments, which depend on the index. The lease liability is remeasured when a change occurs in future leases, which results from a change in the index or price level used to determine the payment in question or a change occurs in the expected amounts paid based on the residual value guarantee. Also changes in estimates concerning the purchase option or extension or termination option of the underlying asset can lead to a reassessment of the lease liability. The amount resulting from the remeasurement of the lease liability is used to adjust the carrying amount of the right-of-use asset, or if the value of the right-of-use asset is zero, it is recognised in profit or loss. The Group applies the recognition exemptions under IFRS 16 for leases of no more than 12 months and low value assets. These are not recognised as assets and their related liabilities in the balance sheet.
As a lessor, Oma Savings Bank Group does not have any contracts that are classified as finance leases. Leases classified as operating leases are recognised on a straight-line basis over the lease term in the income
statement item 'Net income from investment assets' or 'Other operating income'. Some fixed-term leases include extension options, the effect of which is taken into account in the calculation if it can be assumed with reasonable certainty that the option in the agreement will be exercised.
Provisions are recognised when the Group has a legal or an actual obligation resulting from a previous event, the fulfilment of the obligation is likely, and the management can evaluate the amount of the obligation in a reliable manner. If it is certain that partial compensation for the obligation will be received from a third party, the compensation is recognised as a separate item. Provisions are reviewed annually on the date of reporting and adjusted if necessary. Provisions are valued at the current value of the amount that is expected in order to fulfil the obligation.
The Group's employee benefits as per the IAS 19 Employee Benefits standard comprise short-term employee benefits, benefits related to the termination of employment and benefits after the employment has been terminated.
Short-term employee benefits are, for example, salaries and benefits in kind, annual holidays, performance rewards and additional insurance that are expected to be paid in full within 12 months from the end of the accounting period during which the employees perform the work in question. Benefits based on the termination of employment comprise severance payments. Pension plans related to benefits after the employment has been terminated are classified as defined benefit plans and defined contribution plans. Defined benefits plans are, for the most part, agreements that include additional pension schemes.
In terms of defined contribution plans, the Group makes fixed pension insurance payments to pension insurance companies and there is no legal or actual obligation to
make additional payments if the pension insurance company is unable to make payments on such benefits. Expenses are recognised as expenses during the relevant accounting period.
In terms of defined benefit plans, the Group has obligations after making payments during the accounting period. For defined benefit plans, liability is presented as the current value of obligations resulting from the plans on the date of reporting less the fair value of funds in the plans. The Group uses an external actuary to define the obligations resulting from benefits after employment has been terminated.
Oma Savings Bank Plc's Board of Directors has decided on a share-based incentive scheme for the Group's key personnel, in which payments are made partly in the form of equity instruments and partly in cash. The purpose of the cash contribution is to cover taxes and tax-like payments incurred to the key personnel. Benefits under the plan are valued at fair value at the time they are granted and are recognised as an expense in the income statement during the period of entitlement. The amount recognised as an expense is based on an estimate of the number of shares to which are expected to be entitled. The fees are fully recognised as a share-based arrangement payable in equity and the expense is amortised for the entire entitlement period and the expense effect is presented in the income statement under personnel expenses. The Group revises the expected number of shares that are expected to be ultimately exercised at each Financial Statements date. Changes in estimates are recognised in the income statement. The amount recognised as an expense is subsequently adjusted to reflect the number of shares finally issued. The requirements of IFRS 2 Share-based Payment apply to the incentive scheme.
Interest income and expenses are recognised over the duration of the contract. Interest income and expenses are recognised on the income statement under 'Net interest income'.
Significant arrangement and transaction fees are recognised using the effective interest method based on the average expected maturity of the loan rather than recognising the income as a one-off gain. The clarification of recognition principles relates to credit issued to corporates and housing companies.
Income from services offered to customers related to, for instance, payment transactions and lending, and fee and commission income related to funds are recognised in fee and commission income. The income is recognised when control of the performance obligation has transferred to the customer in the amount that the Group considers itself entitled to against services rendered. For fees and commissions spanning several years, the portion related to the accounting period is entered.
Fee and commission expenses mainly include fees and commissions related to card and payment transactions as well as costs related to obtaining financing.
On the basis of the exemption allowed by the IFRS 15 standard, information is not presented for the transaction prices allocated to the remaining performance obligations, which transaction prices are part of an agreement whose original expected duration is no more than one year, or if the Group is entitled to invoice the customer for a consideration, the cash amount of which directly corresponds with the value of the performance provided by the Group to the customer by the moment of review.
The following are recognised in net income on financial assets and liabilities: gains and losses from sales, valuation gains and losses, dividend income from financial instruments recognised at fair value in profit and loss, including equity instruments and net income from financial assets held for trading and net income from investment properties. Dividend income has been recognised when an entitlement to dividend exists.
Additionally, net income from currency exchanges as well as net income from fair value hedge accounting are recognised under the same item.
Result-based taxes of the accounting period for companies in the Group, adjustments to taxes for previous accounting periods and changes in deferred taxes are recognised in the Group's income statement. Taxes are recognised in the income statement except for items that are directly related to equity or other items recognised in the comprehensive income statement. In these cases, the tax is also recognised under these items. Income taxes are recognised based on the estimated taxable income for the year.
Deferred taxes are calculated on the taxable temporary and deductible differences between bookkeeping and taxation. Deferred tax assets are recognised up to the amount for which there is likely to be future taxable income, against which the temporary difference can be applied. Deferred tax assets based on unused losses verified in taxation are recognised if the accumulation of taxable income is likely and the asset can be utilised.
The Company's banking operations form a segment as per the definition in the IFRS 8 Operating Segments standard. Based on the Company's business model and the nature of operations, the entire Group is treated as a reportable segment. The Group conducts business only in Finland.
Preparing Financial Statements in compliance with the IFRS standards has required the Group's management to make certain estimates and assumptions that impact the amounts of items presented in the financial statements and the information included in the accompanying notes. The essential estimates by the management relate to the future and the material factors of uncertainty in terms of the date of reporting. They are closely related to, for example, the determination of fair value and the impairment of financial assets, loans and other receivables
as well as tangible and intangible assets. Even though the estimates are based on management's best current perception, it is possible that the outcome will deviate from the estimates used in the financial statements.
The application of the impairment losses on financial assets model under IFRS 9 requires the management to make judgemental decisions regarding estimates and assumptions about whether the credit risk associated with the financial instrument has increased significantly since the initial recognition and requires forward-looking information to be taken into account in the recognition of on-demand credit losses. The Company's management has assessed the effects of the Russian invasion war and the subsequent rise in inflation and interest rates on an industry-by-industry basis and released previously made discretionary additional group-specified allowances for certain risk industries in the corporate loan portfolio. Further details of the impact of the uncertainty of the environment on the Company's risk position are provided in Note G2.
The model for impairment of financial assets brought by IFRS 9 requires management to make decisions, estimates and assumptions especially on the following topics:
Calculation models and parameters for different portfolios have been selected based on their business significance and criticality. More complex models and parameters are defined for portfolios that are the largest in euro and customer numbers. The Company has emphasized the model most suitable for each type of loan in its ECL model choices, as well as considering the company's size using the principle of proportionality.
In ECL calculation, the Company notes information based on future prospects. The Company uses adjustments to the PD parameter for loan portfolio liabilities. The adjustments are based on projections of the
macroeconomic environment development and adjustments to the LGD parameter, which are based on different scenarios of the value development of real estate collateral in the future. PD values are adjusted from the moment of calculation to the next three years based on projections of Finland's GDP developments and the scenarios generated from these. Four scenarios and related realisation probabilities have been defined: a baseline scenario (40%), a negative scenario (30%) a recession scenario (10%), and a positive scenario (20%). The weight of the negative scenario is relatively high due to continuing uncertainty in the economy.
The management's judgement is also used in cases where the fair value of a financial instrument is determined through valuation methods. If no verifiable market inputs exist on which the used valuation methods can be based, the management team has to assess which other inputs to use to determine fair value. The principles used to determine fair value are described in more detail in the section 'Determining the fair value'.
Management assesses when it considers that the market for financial instruments is not functioning. Such a situation could arise as a result of widespread disruption to the global economy. Additionally, it must be evaluated whether a single financial instrument is the object of active trading and whether the price information received from the market is a reliable indicator of the fair value of the financial instrument.
In connection with the financial statements, the management reviews the impairment of tangible and intangible assets. Impairment tests require the management team's discretion and assessment of the amount of money accrued by the asset in the future, its financial useful life and used discount rate.
In business consolidation, the determination of fair values requires consideration from the Company's management regarding the recognition and valuation at fair value of the consideration given and identifiable assets, liabilities and contingent liabilities.
The receivables transferred in connection with the acquisition of Liedon Savings Bank's business were valued at fair value at acquisition. The fair value adjustment based on management's judgement is in total EUR 7.3 million at the time of reporting. In addition, in connection with the acquisition, the Company recognised a liability of EUR 15.0 million at fair value through profit or loss for the five-year periodic concerning the liability of Liedon Savings Bank as a credit institution member leaving the consortium of Savings Banks. The amount of the liability at fair value through profit and loss is unchanged in the review period. During the reporting period, the amount of liability at fair value through profit and loss in connection with Eurajoen Savings Bank's business transaction has been reassessed and the amount of debt has been reduced by EUR 0.7 million. At the time of closing the accounts, the value of the debt is EUR 4.6 million.
New and amended standards and interpretations published by IASB by 31 December 2023 are not expected to have a significant impact on the Company's consolidated financial statements.
Oma Savings Bank Plc focuses on retail banking operations and provides its customers 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. The Company is also engaged in mortgage banking operations. The Company's key risk types are credit risk, operational risk, market risk and liquidity risk.
The Group's internal control, risks and risk management and disclosure requirements of CRR, Part 8, (Pillar III) are discussed in more detail in the Capital and Risk Management Report, which is released as a separate report alongside the Financial Statements.
Risk management is an essential part of the bank's business and internal control. The Company's risk management principles are defined by the risk management policy approved by the Board of Directors. The purpose of the Company's risk management is to ensure that the Company's significant risks are identified, assessed and quantified, and that the risks are monitored and controlled as part of day-to-day business management. The Company's risks are evaluated regularly, and the Board of Directors regularly assesses the Company's risk management strategy, risk appetite, risk-bearing ability and approach towards risk-taking. Risk surveys and measures taken based on the surveys, systematic monitoring and the analysis of the operating environment and market are used to control risks. Functions independent of business operations have been arranged to ensure efficient and comprehensive risk management and internal control as follows:
It is the task of the Board of Directors to ensure that the risk control function, compliance function and internal audit function have adequate and competent personnel resources with respect to the nature, scope and diversity of the Company's operations. The goal of the risk control function is to develop systematic and preemptive risk management, through which the Company's business can be developed safely. In the Company's organisation the risk control function reports directly to the CEO and reports to the Board of Directors, the CEO and other executive management.
The framework for the Company's risk management function is based on a principle of three defence lines, which are
The entire Company's personnel, both the customer interface and those working with other tasks, must comply in their daily work with the Company's Code of Conduct and risk management principles.
Internal audit assesses and ensures the sufficiency, functioning and efficiency of internal control in the Company's different units, functions and subsidiaries.
The development of capital adequacy is reported to the Board of Directors every month. The reporting monitors the total capital ratio and Common Equity Tier 1 capital. The Company's Board of Directors has confirmed a minimum Common Equity Tier 1 (CET1) capital ratio at least 2 percentage points above regulatory requirement for the medium-term. The goal is to ensure capital adequacy even when business cycles weaken.
More detailed information on the Group's capital adequacy is available in the Report of Board of Directors and the Capital and Risk Management Report.
Credit risk refers to the possibility that a counterparty fails to meet its obligations in accordance with agreed terms and conditions. The Company's credit risk largely consists of granted loans. The Company has continued to develop the credit rating models introduced during 2021 in accordance with IRB requirements.
Counterparty risk is defined as a risk of loss or a negative valuation difference resulting from a weakening of the counterparty's credit rating. Credit risk and counterparty risk also result from other receivables, such as bonds in the company's investment portfolio, debt securities and derivative contracts and off-balance sheet commitments, such as undrawn credit facilities and limits, guarantees and letters of credit.
Oma Savings Bank Plc's credit risk primarily consists of exposures secured by immovable property, retail exposures and business loans. On 31 December 2023, the share of exposures secured by immovable property of the credit risks was 46.8% (48.9%), the share of retail exposures 16.1% (17.6%) and exposures to corporates 23.9% (24.6%). Credit risk exposures are well-diversified geographically and sector-wise, which reduces the Company's concentration risk. The Company uses the definition of non-performing loans according to EBA/GL/2016/07. Non-performing loans accounted for 2.1% of the loan portfolio.
The goal of credit risk management is to limit the profit and loss and capital adequacy effects of risks resulting from customer exposures to an acceptable level. Credit and counterparty risk are measured by estimating expected credit losses. Expected credit losses are estimated using the ECL model, in accordance with IFRS 9.
At the end of the financial year, the total grace periods of the loans from the entire loan stock amounted to EUR 525.1 million. All grace periods in force at the end of the financial year, regardless of the reason or start date, have been included in the capital.
The calculation of Expected Credit Loss (ECL) is carried out monthly for each loan. In ECL calculation, the expected credit loss for each month is calculated for each loan, based on the Probability of Default (PD) and the Loss Given Default (LGD).
The Company's loan portfolio is classified into different clusters based on customers' different risk characteristics. In assessing whether the credit risk related to a financial instrument has increased significantly, the change in the risk of a default occurring over the expected life of the financial instrument shall be observed. When carrying out this assessment, the risk of default occurring over the expected life of the instrument at the reporting date is compared with the risk of default at the date of initial recognition. A significant increase in credit risk leads to the transfer of the loan from stage 1 to stage 2.
The Company's loan portfolio has grown strongly during the financial year. The quality of the loan portfolio has remained at a good level. Matured and non-performing receivables from the loan portfolio grew from 2.2 percent to 2.9 percent. However, the general economic situation is deteriorating, which is why the quality of the credit portfolio may deteriorate in the future.
During 2020 and 2021, the Company made additional loss allowance based on management's judgement related to the corona pandemic and the Russian invasion war in total EUR 5.9 million. These allowances have been fully released during the financial year. The Company made
additional allowances of EUR 1.0 million based on the management's judgement during the financial year. The allowances anticipate the effects of uncertainties related to the economic operating environment affecting the Company's loan portfolio. The aim is to cover possible credit losses to the extent that the expected credit loss calculation model does not recognise them. At the end of the year, the future-looking variables of the model were updated due to the updated forecasts of Finland's economic situation.
Customers, especially the watchlist customers, have been monitored intensively due to the uncertainty in the economic environment. In the transition from 1 to 2, significant growth in credit risk is identified. Stage 3 of the ECL calculation classifies all loans that the company considers to meet the definition of default. Category criteria for stage 3 include, for example, delays in contractual payments by 90 days, customer debt renovation or bankruptcy, or loan transfer to debt collection. The calculation of expected credit losses is described in more detail in Note G1 Accounting principles for the Consolidated financial Statements.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Private customer | 3,585,722 | 2,858,099 |
| -Expected credit losses | -19,481 | -9,883 |
| Corporate customers | 1,255,520 | 1,093,700 |
| -Expected credit losses | -11,801 | -13,817 |
| Housing companies | 736,068 | 461,339 |
| -Expected credit losses | -447 | -254 |
| Agricultural customers | 300,447 | 271,112 |
| -Expected credit losses | -3,130 | -820 |
| Others | 154,776 | 94,618 |
| -Expected credit losses | -600 | -59 |
| Total | 6,032,533 | 4,778,869 |
| Total expected credit losses | -35,458 | -24,833 |
| (1,000 euros) | 31 Dec 2023 | % of credit portfolio |
31 Dec 2022 | % of credit portfolio |
|---|---|---|---|---|
| Matured exposures, 30-90 days | 31,253 | 0.5% | 18,509 | 0.4% |
| Non-matured or matured less than 90 days, non-repayment likely | 89,842 | 1.5% | 47,497 | 1.0% |
| Non-performing exposures, 90-180 days | 16,950 | 0.3% | 5,635 | 0.1% |
| Non-performing exposures, 181 days - 1 year | 14,374 | 0.2% | 6,186 | 0.1% |
| Non-performing esposures, > 1 year | 21,882 | 0.4% | 28,252 | 0.6% |
| Matured and non-performing exposures total | 174,301 | 2.9% | 106,080 | 2.2% |
| Performing exposures and matured exposures with forbearances | 74,099 | 1.2% | 62,011 | 1.3% |
| Non-performing exposures with forbearances | 57,593 | 1.0% | 33,376 | 0.7% |
| Forbearances total | 131,692 | 2.2% | 95,387 | 2.0% |
Figures include interest due on items.
The Company's credit risk management guidelines define the operating models for monitoring watchlist customers and watchlist loans. Watchlist customers are customers whose credit rating is weak or has weakened, and they are therefore transferred to enhanced monitoring. In addition, customers whose credit rating has weakened but who do not yet meet the definition of a watchlist customer, are taken to enhanced monitoring. In addition to these definitions, the customer can be classified as a watchlist customer in deviation to these criteria by using discretion.
The review performed in the case of these commitments on, for example, the securing of the receivable, changing the customer's credit rating and recognising credit losses. The purpose of monitoring is to identify watchlist loans or loans that are becoming watchlist loans as early as possible. Watchlist customers and liabilities are monitored by branch and in relation to the loan portfolio's size. An action plan is drawn up for each watchlist customer, when the limits defined in the credit guidelines are exceeded.
During the third quarter of the year the Company updated its internal credit risk models and due to this the comparison is not fully comparable. The update has increased the number of risk grades for private and corporate customers. Risk grades have not been calculated retroactively for the customers and due to this the comparison figures are not updated. Comparison figures per risk rating are the same as has been previously reported.
| Credit ratings (1,000 euros) | 31 Dec 2023 | % | 31 Dec 2022 | % |
|---|---|---|---|---|
| AAA | 1,394,580 | 38.9% | 343,766 | 12.0% |
| AA | 1,012,406 | 28.2% | 1,127,696 | 39.5% |
| A+ | 389,876 | 10.9% | - | 0.0% |
| A | 248,292 | 6.9% | 801,822 | 28.1% |
| B+ | 325,429 | 9.1% | - | 0.0% |
| B | 52,768 | 1.5% | 367,027 | 12.8% |
| C | 77,754 | 2.2% | 116,123 | 4.1% |
| D | 23,458 | 0.7% | 69,493 | 2.4% |
| Not rated | 248 | 0.0% | 1,067 | 0.0% |
| Defaulted | 60,911 | 1.7% | 31,106 | 1.1% |
| Private customers | 3,585,722 | 100.0% | 2,858,099 | 100.0% |
| Credit ratings (1,000 euros) | 31 Dec 2023 | % | 31 Dec 2022 | % |
|---|---|---|---|---|
| AAA | 1,080,143 | 54.2% | 720,465 | 46.3% |
| AA | 352,148 | 17.7% | 353,818 | 22.8% |
| A+ | 278,902 | 14.0% | 236,596 | 15.2% |
| A | 156,222 | 7.8% | 137,138 | 8.8% |
| B+ | 42,880 | 2.2% | - | 0.0% |
| B | 17,757 | 0.9% | 59,353 | 3.8% |
| C | 8,092 | 0.4% | 8,101 | 0.5% |
| Not rated | 122 | 0.0% | - | 0.0% |
| Defaulted | 55,322 | 2.8% | 39,568 | 2.5% |
| Corporates and housing companies | 1,991,588 | 100.0% | 1,555,040 | 100.0% |
The Company classifies its customers into risk classes based on information available on the counterparty. External credit rating data or an internal assessment is used for credit rating. Monitoring is continuous and can lead to a transfer from one risk class to another.
In lending, a risk concentration is born or can be born, for example when the loan portfolio includes large amounts of loans and other liabilities:
Risk rating 1: Low-risk items are considered to include the Company's internal credit rating of AAA level private, corporate, housing companies and AAA-AA+ level agricultural customers.
Risk rating 2: Reasonable risk items include the Company's internal credit rating of AA-B+ level private customers, AA-A+ level corporate and housing companies and AA-A level agricultural customers.
Risk rating 3: Increased risk items include the Company's internal credit rating of B-C-level private customers and A-B-level corporate and housing companies, as well as B+-B-level agricultural customers.
Risk rating 4: The highest risk items are considered to be the Company's internal credit rating of D-level private customers, C-level corporate and housing companies, C-D-level agricultural customers and defaulted customers.
Other customers are based on the Company's internal assessment of the risk rating.
The 'No rating' item includes loans and debt securities for which the Company has not defined credit ratings or for which there are no external credit ratings available.
During the third quarter of the year the Company updated its internal credit risk models and due to this the comparison is not fully comparable. The update has increased the number of risk grades for private and corporate customers which is why the risk ratings shown in the below tables have been redefined. Risk grades have not been calculated retroactively for the customers and due to this the comparison figures are not updated. Comparison figures per risk rating are the same as has been previously reported.
| Loans and receivables and off-balance | ||
|---|---|---|
| sheet commitments | 31 Dec 2023 31 Dec 2022 | |
| Risk rating 1 | 1,491,431 | 1,562,267 |
| Risk rating 2 | 2,040,053 | 1,206,970 |
| Risk rating 3 | 132,059 | 117,572 |
| Risk rating 4 | 84,935 | 101,218 |
| No rating | 2,671 | 4,130 |
| Capital items by risk category, total | 3,751,150 | 2,992,157 |
| Loss allowance | 19,495 | 10,102 |
| Total | 3,731,655 | 2,982,055 |
| Total | 1,339,506 | 1,183,601 |
|---|---|---|
| Loss allowance | 11,964 | 13,882 |
| Capital items by risk category, total | 1,351,470 | 1,197,482 |
| No rating | 405 | - |
| Risk rating 4 | 60,964 | 104,505 |
| Risk rating 3 | 196,319 | 124,924 |
| Risk rating 2 | 614,543 | 535,879 |
| Risk rating 1 | 479,239 | 432,174 |
| Loans and receivables and off-balance sheet commitments |
31 Dec 2023 31 Dec 2022 |
| Loans and receivables and off-balance | ||
|---|---|---|
| sheet commitments | 31 Dec 2023 31 Dec 2022 | |
| Risk rating 1 | 651,897 | 328,309 |
| Risk rating 2 | 73,089 | 125,284 |
| Risk rating 3 | 29,462 | 20,208 |
| Risk rating 4 | 2,817 | 6,934 |
| Capital items by risk category, total | 757,264 | 480,734 |
| Loss allowance | 449 | 255 |
| Total | 756,815 | 480,480 |
| Agricultural customers | |
|---|---|
| Loans and receivables and off-balance sheet commitments |
31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Risk rating 1 | 109,179 | 55,670 |
| Risk rating 2 | 159,145 | 162,555 |
| Risk rating 3 | 22,332 | 50,930 |
| Risk rating 4 | 17,331 | 10,024 |
| No rating | 6,454 | 157 |
| Capital items by risk category, total | 314,442 | 279,336 |
| Loss allowance | 3,146 | 824 |
| Total | 311,296 | 278,512 |
| Loans and receivables and off-balance | ||
|---|---|---|
| sheet commitments | 31 Dec 2023 31 Dec 2022 | |
| Risk rating 1 | 96,123 | 73,979 |
| Risk rating 2 | 76,829 | 29,146 |
| Risk rating 3 | 932 | 1,157 |
| Risk rating 4 | 42 | 22 |
| Capital items by risk category, total | 173,926 | 104,304 |
| Loss allowance | 674 | 68 |
| Total | 173,252 | 104,236 |
| Debt securities | 31 Dec 2023 31 Dec 2022 | |
| Risk rating 1 | 476,133 | 471,772 |
| Risk rating 2 | 1,366 | 371 |
| Risk rating 3 | 252 | - |
| Risk rating 4 | - | 83 |
| No rating | 68,425 | 68,055 |
| Capital items by risk category, total | 546,177 | 540,281 |
| Loss allowance | 478 | 438 |
Total 545,699 539,843
| Loans and receivables and off-balance | |||||||
|---|---|---|---|---|---|---|---|
| sheet commitments by industry | Risk rating 1 Risk rating 2 Risk rating 3 Risk rating 4 | No rating 31 Dec 2023 31 Dec 2022 | |||||
| Enterprises | 1,150,587 | 726,995 | 223,868 | 63,856 | 6,406 | 2,171,713 | 1,708,929 |
| Real estate | 789,653 | 321,255 | 124,932 | 15,127 | - | 1,250,967 | 888,856 |
| Agriculture | 2,341 | 50,673 | 1,323 | 1,268 | 6,002 | 61,607 | 48,015 |
| Construction | 61,997 | 42,817 | 14,809 | 6,022 | - | 125,645 | 120,465 |
| Accommodation and food service activities |
25,546 | 37,440 | 17,813 | 3,956 | - | 84,755 | 74,663 |
| Wholesale and retail | 80,829 | 76,636 | 19,660 | 5,570 | - | 182,695 | 188,307 |
| Finance and insurance | 16,143 | 24,115 | 4,230 | 12 | - | 44,500 | 55,607 |
| Others | 174,078 | 174,058 | 41,101 | 31,901 | 405 | 421,542 | 333,016 |
| Public sector entities | 1,276 | 15,209 | - | - | - | 16,486 | 3,617 |
| Non-profit communities | 15,929 | 18,812 | 91 | - | - | 34,832 | 29,383 |
| Financial and insurance institutions | 60,460 | 42,633 | 842 | 42 | - | 103,977 | 70,918 |
| Households | 1,599,617 | 2,160,010 | 156,304 | 102,191 | 3,124 | 4,021,245 | 3,241,167 |
| Total 31.12. | 2,827,870 | 2,963,659 | 381,105 | 166,089 | 9,530 | 6,348,252 | 5,054,014 |
| 216 | Annual Report 2023 | Contents | OmaSp in Brief | Sustainability | Corporate Governance | Report of Board of Directors | Financial Statements | 217 |
|---|---|---|---|---|---|---|---|---|
| Consolidated financial statements | Group's notes | Parent company's financial statements | Parent company's notes Signatures |
Audit report |
Credit risk is managed through collaterals and covenants. Collaterals are taken for exposures to secure repayment. As a general rule, loans must have a secure collateral position, a collateral shortfall can be accepted in the best credit categories. In corporate loans, risk is often hedged by agreeing with the customer on a covenant, which enables the company to renegotiate the terms linked to the loan if the customer's risk position changes.
Loan collateral is included in the expected credit loss models as an item reducing the loss allowance. The collateral value is affected by the type of collateral, such as residential or commercial apartment or real estate.
The Company is engaged in mortgage banking and, as a result, it monitors the development of the amount of eligible loans to secure refinancing through covered bonds.
| LTV | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| 0-50% | 25.1% | 23.4% |
| 50-60% | 13.0% | 15.1% |
| 60-70% | 17.6% | 19.9% |
| 70-80% | 17.3% | 16.1% |
| 80-90% | 13.7% | 13.0% |
| 90-100% | 13.4% | 12.5% |
| Total | 100.0% | 100.0% |
The table shows the LTV distributions of loans secured at the time of reporting, based on the regulations of the Mortgage Bank. In table categories, the total loan amount is displayed in the LTV category to which its highest LTV value belongs. For example, a loan of EUR 55,000 secured by a property of EUR 100,000 is calculated in the LTV category at 50-60%.
| Loans and receivables from public and public sector titi |
5,971,301 | 4,733,778 | |
|---|---|---|---|
| Other | 602,614 | 495,780 | Mostly property collateral |
| Consumer credits | 360,312 | 324,335 Mostly residential real estate collateral | |
| Corporate loans | 1,898,331 | 1,465,838 | Mostly property collateral |
| Home mortgages | 3,110,044 | 2,447,825 Mostly residential real estate collateral | |
| (1,000 euros) | 31 Dec 2023 31 Dec 2022 | Description of collateral held |
Liquidity risk can be defined as the difference in the balance between incoming and outgoing cash flows. The risk may materialise if the Company cannot meet its maturing payment obligations, or an acceptable balance is not achieved within the limits of tolerable costs. The Company's greatest liquidity risks arise from the difference in maturity of borrowing and lending and from the refinancing of greater bonds.
During 2023, the Company's liquidity has remained at a stable level despite the general uncertainty, and in addition to which bonds issued by the Company have strengthened its liquidity position and reduced refinancing risk. Prolonged inflation and high interest rates in the market are reflected as an increase in uncertainty, especially in the refinancing markets. The increased level of interest rates, in turn, can be seen as an increase in the cost of market-based financing. Despite the increase in costs, the availability of funding has remained at a good level.
During 2023, strongly rising interest rates turned to decline in the last quarter of the year. However, inflationary pressures will remain at a higher level than normal as a result of low unemployment and higher wage levels, when interest rates will presumably continue to show large swings during 2024. The new interest rate environment is also reflected in the competitive bidding of deposits, as banks offer an even higher deposit rate. At the same time, the general development of deposits in Finland is in a downward direction, as vast majority of available funds go to consumption instead of saving as a result of the i
increased cost of living for consumption. Despite the general uncertainty in the economy, the Company's liquidity has remained stable thanks to a broad financing base. The Company further strengthened its liquidity by issuing a covered bond in November 2023. With the issuance, the Company will refinance the EUR 300 million covered bond maturing at the beginning of April 2024.
The management of Oma Savings Bank Plc's liquidity risk is based on the Company's ability to procure sufficient cash that is competitive in price in both the short and long term. A key component of liquidity risk management is the planning of the liquidity position in both the short and long term. Additionally, by planning the liquidity reserve, the bank can prepare for weakening economic trends on the markets and for any changes to legislation. The goal of the Company's liquidity reserve is to cover one month's outflows.
Liquidity risk management is supported by active risk management, monitoring of the balance sheet and cash flows and internal calculation models. The continuous monitoring of the liquidity situation is important so that the Company can manage outgoing cash flows.
The Company's liquidity risk is also managed by monitoring and forecasting changes in market factors and market development. If forecasts show that market liquidity is falling, the Company can set tighter internal limits for liquidity risk management. Liquidity risk management also includes liquidity reserve management. This ensures that the Company has sufficient amounts of liquid securities available to cover the collateral requirements of different business activities.
| Financial assets | 31 Dec 2023 | ||||
|---|---|---|---|---|---|
| (1,000 euros) | less than 3 | months 3 - 12 months | 1 - 5 years | over 5 years | Total |
| Debt securities eligible for refinancing with central banks |
61,028 | 15,084 | 228,827 | 207,411 | 512,350 |
| Loans and receivables to credit institutions | 191,805 | 500 | - | - | 192,305 |
| Loans and receivables to the public and public sector entities |
782,390 | 416,030 | 1,546,985 | 3,251,669 | 5,997,074 |
| Debt securities | 3,730 | 2,528 | 27,333 | 787 | 34,379 |
| Derivative contracts | - | - | 16,384 | 28,540 | 44,924 |
| Total | 1,038,953 | 434,142 | 1,819,530 | 3,488,408 | 6,781,033 |
| Financial assets | 31 Dec 2022 | ||||
|---|---|---|---|---|---|
| (1,000 euros) | less than 3 | months 3 - 12 months | 1 - 5 years | over 5 years | Total |
| Debt securities eligible for refinancing with central banks |
7,380 | 12,348 | 228,359 | 253,927 | 502,013 |
| Loans and receivables from credit institutions | 114,155 | 500 | - | - | 114,655 |
| Loans and receivables from public and public sector entities |
266,049 | 387,665 | 1,465,511 | 2,634,811 | 4,754,036 |
| Debt securities | 1,923 | 3,054 | 25,361 | 8,352 | 38,689 |
| Derivative contracts | 15 | 36 | 144 | 1,736 | 1,931 |
| Total | 389,522 | 403,602 | 1,719,374 | 2,898,825 | 5,411,324 |
| Total | 3,622,237 | 861,692 | 1,891,752 | 567,396 | 6,943,077 |
|---|---|---|---|---|---|
| Derivatives and other liabilities held for trading |
- | - | 1,556 | 7,899 | 9,455 |
| Subordinated debts | - | - | 60,000 | - | 60,000 |
| Debt securities issued to the public | 154,464 | 521,584 | 1,757,162 | 496,848 | 2,930,058 |
| Liabilities to the public and public sector entities |
3,389,603 | 340,108 | 48,599 | - | 3,778,310 |
| Liabilities to credit institutions and central banks |
78,170 | - | 24,435 | 62,649 | 165,255 |
| (1,000 euros) | less than 3 | months 3 - 12 months | 1 - 5 years | over 5 years | Total |
| Financial liabilities |
| Financial liabilities | 31 Dec 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| (1,000 euros) | less than 3 | months 3 - 12 months | 1 - 5 years | over 5 years | Total | |||
| Liabilities to credit institutions and central banks |
4,765 | 150,000 | 23,324 | 64,453 | 242,543 | |||
| Liabilities to the public and public sector entities |
2,869,454 | 197,722 | 45,288 | - | 3,112,464 | |||
| Debt securities issued to the public | 133,777 | 261,787 | 1,691,386 | - | 2,086,950 | |||
| Subordinated debts | - | - | - | 40,000 | 40,000 | |||
| Derivatives and other liabilities held for trading |
73 | - | 2,935 | 1,175 | 4,184 | |||
| Total | 3,008,070 | 609,508 | 1,762,933 | 105,629 | 5,486,141 |
Liquidity risk is measured through a liquidity buffer requirement (LCR) and a long-term funding minimum requirement (NSFR). The Group's liquidity requirement (LCR) remained at a good level, being 248.9 (159.9)% at the end of 2023. Net stable funding ratio (NSFR) was 117.8 (114.3)% in year 2023. The NSFR key figure has risen moderately with new issues. The Company's financial plan for the coming years supports the development of NSFR.
| 31 Dec 2023 30 Sep 2023 30 Jun 2023 31 Mar 2023 | ||||
|---|---|---|---|---|
| LCR, % | 249% | 154% | 150% | 126% |
| NSFR, % | 118% | 115% | 120% | 117% |
LCR and NSFR figures are unaudited. LCR calculation on 31 December 2022 and the NSFR calculation adjusted for the comparison periods retrospectively.
The strong rise in market interest rates that occurred in 2023 is seen as a fall in value across the entire bond market. The effects are also transmitted to the Company's investment portfolio, which mainly consists of fixed-rate bonds. The Company has implemented hedging measures during 2022, which balanced the effect of the rise in market interest rates. During 2023, the size of the investment portfolio has remained stable. The Company's investments are mainly in well-rated government bonds and covered bonds, whose reactions to negative news were, for example, more moderate than in the corporate bond market. Taking into account the market changes that took place during the year, the development of the entire investment portfolio has remained in line with expectations.
Market risk is managed, for example, by diversifying the contents of the investment portfolio sufficiently. Diversifying the portfolio reduces the concentration risk resulting from individual investments. The Company monitors monthly the market values of securities acquired for investment purposes and the cash flows related to their transactions. Regular reports are made to the Board of Directors on the contents and balance sheet position of the securities portfolio. Market risk contained in the securities portfolio is assessed in relation to the Company's result and own funds. Limits and monitoring limits have been set for measuring and monitoring market risks.
Oma Savings Bank Plc does not trade in shares for trading purposes. A sensitivity analysis of share price risk has not been presented as it does not have a material effect on the Group's financial position.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|---|
| Fair value | % | Fair value | % | ||
| Shares and other equity instruments | 13,519 | 2.4% | 10,604 | 1.9% | |
| Debt securities | 546,729 | 97.4% | 540,702 | 97.8% | |
| Investment properties | 1,167 | 0.2% | 1,431 | 0.3% | |
| Investment assets total | 561,414 | 100% | 552,737 | 100% |
5.2 Interest rate risk
The interest rate risk in the banking book forms the majority of the Company's interest rate risk. The interest rate risk results from differences in the interest rate levels and maturities of assets and liabilities. In addition, market interest rates affect the market prices of the securities in the investment portfolio. The amount of interest rate risk is reported regularly to the Board of Directors, which has set an upper limit for the interest rate risk.
The inflation that started in 2021 and accelerated due to the sanctions of the Russian invasion war has forced the central bank to raise its key interest rate, whereby the interest rate has remained at a high level until the end of 2023. However, in the last quarter of the year, market interest rates turned down as inflation expectations eased. This has increased the volatility and affected the Company's interest rate sensitivities. Due to the structure of the Company's balance sheet, net interest income increases as interest rates rise. The Company has continued to implement balance sheet protections as planned. With them, the effect of interest rate sensitivity can be managed. The Company monitors interest rate sensitivities constantly and, where necessary, for managing interest rates, the Company has the possibility to increase hedging measures to limit the effects.
In accordance with the Company's interest rate risk policy, the Company may use derivatives to manage interest rate risk. For covered bonds, the Company may make derivatives to hedge risk. In accordance with the Company's policy, interest rate swaps can be used mainly for hedging. The Company's goal is to balance the interest rate bases for assets and liabilities and reduce unexpected changes in the net interest income. The pricing of lending and borrowing is the key in terms of the development of the Company's net interest income.
| (1, 000 euros) | 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|---|
| -1% change +1% change -1% change +1% change | |||||
| Change 1-12 months |
-13,063 | 13,585 | -12,333 | 12,372 | |
| Change 13-24 months |
-30,595 | 31,142 | -26,422 | 26,516 |
Operational risk means a consequence or risk of loss resulting from inadequate or deficient internal processes, systems or people or external factors. Reputational risk, legal risks, compliance risk, information security risks and risks related to money laundering and the funding of terrorism are also included in operational risks. Outsourced functions also generate operational risk. Realised operational risks can lead to financial losses or a loss of reputation for the Company.
Operational risk forms a significant risk area for Oma Savings Bank Plc. It is typical for operational risk that potential losses resulting from the risk are not always easy to measure. Reasons for this may include the delayed realisation of the risk or that the risks, when they are realised, cannot be quantified as concrete financial losses.
Oma Savings Bank Plc's main source of operational risk is cyber risks. The operating environment has changed with the Russian invasion war, and the probability of a cyberattack has increased. The IT-risk is protected with many different methods and protection against cyberattacks applies not only to the IT environment but also to the entire personnel.
Oma Savings Bank Plc calculates the operational risk in accordance with Pilar I using the basic indicator approach for capital adequacy. This amount on 31 December 2023 was EUR 322.3 million, of which the own funds requirement was EUR 25.8 million. The increase is due to a significant increase in net interest income and fee and commission income.
| (1, 000 euros) | 2023 | 2022 | 2021 |
|---|---|---|---|
| Gross income | 248,531 | 144,889 | 122,229 |
| The revenue indicator | 37,280 | 21,733 | 18,334 |
| Requirement for own funds of operational risk | 25,782 |
|---|---|
| Risk-weighted amount of operational risk | 322,280 |
The Company's Board of Directors annually approves the operational risk management principles. In managing operational risk, the Company's main objective is to
manage reputation risk and to ensure the continuity of business activities and compliance with regulations in the short and long term. Operational risk management ensures that the values and strategy of the Company are achieved throughout the business activities. Operational risk management covers all material risks related to business activities.
Operational risk management is applied in all the Company's business units by identifying, measuring, monitoring and assessing the operational risks linked to the units. The business units also assess the likelihood of the risks and their impacts if the risks materialise. The company-wide process allows the management to assess the extent of any losses stemming from operational risk if the risk were to materialise. The risk assessment process is updated at least once a year and always when the business's operational environment changes. Operational risk management focuses on risk and control assessment as well as continuity and change management processes.
As part of operational risk management, the Company aims to reduce the likelihood of operational risk through its internal code of conduct and by training personnel. The control points defined for the processes are also a key component of preventing operational risk. The Company reduces the impact of operational risk also by maintaining insurance for real estate and the fixed assets it owns. Each employee is responsible for managing operational risk in their own job role. Realised operational risks are reported to the management of the business unit.
New products, services, and outsourced service providers are approved separately through a separate Company approval process prior to deployment. The approval process ensures that the risks associated with new products and services are properly identified and assessed. The same approval process also applies when developing existing products.
| Assets (1,000 euros) 31 Dec 2023 |
Amortised cost | Fair value through other comprehensive income |
Fair value through profit or loss |
Hedging derivatives |
Booking value, total |
Fair value |
|---|---|---|---|---|---|---|
| Cash and cash equivalents | 682,117 | - | - | - | 682,117 | 682,117 |
| Loans and receivables from credit institutions | 192,305 | - | - | - | 192,305 | 192,305 |
| Loans and receivables from customers | 5,997,074 | - | - | - | 5,997,074 | 5,997,074 |
| Derivatives, hedge accounting | - | - | - | 44,924 | 44,924 | 44,924 |
| Debt instruments | - | 545,699 | 1,030 | - | 546,729 | 546,729 |
| Equity instruments | - | - | 13,519 | - | 13,519 | 13,519 |
| Financial assets, total | 6,871,497 | 545,699 | 14,549 | 44,924 | 7,476,669 | 7,476,669 |
| Investments in associated companies | - | - | - | - | 24,131 | 24,131 |
| Investment properties | - | - | - | - | 1,167 | 1,167 |
| Other assets | - | - | - | - | 140,939 | 140,939 |
| Assets, total | 6,871,497 | 545,699 | 14,549 | 44,924 | 7,642,906 | 7,642,906 |
| Hedging | Booking value, | |||
|---|---|---|---|---|
| 31 Dec 2023 | Other liabilities | derivatives | total | Fair value |
| Liabilities to credit institutions | 165,255 | - | 165,255 | 165,255 |
| Liabilities to customers | 3,778,310 | - | 3,778,310 | 3,778,310 |
| Derivatives, hedge accounting | - | 9,455 | 9,455 | 9,455 |
| Debt securities issued to the public | 2,930,058 | - | 2,930,058 | 2,930,058 |
| Subordinated liabilities | 60,000 | - | 60,000 | 60,000 |
| Financial liabilities, total | 6,933,623 | 9,455 | 6,943,078 | 6,943,078 |
| Non-financial liabilities | - | - | 158,776 | 158,776 |
| Liabilities, total | 6,933,623 | 9,455 | 7,101,854 | 7,101,854 |
| Assets | Fair value | |||||
|---|---|---|---|---|---|---|
| (1,000 euros) | through other | Fair value | ||||
| comprehensive | through profit | Hedging | Booking value, | |||
| 31 Dec 2022 | Amortised cost | income | or loss | derivatives | total | Fair value |
| Cash and cash equivalents | 402,030 | - | - | - | 402,030 | 402,030 |
| Loans and receivables from credit institutions | 114,655 | - | - | - | 114,655 | 114,655 |
| Loans and receivables from customers | 4,754,036 | - | - | - | 4,754,036 | 4,754,036 |
| Derivatives, hedge accounting | - | - | - | 1,931 | 1,931 | 1,931 |
| Debt instruments | - | 539,843 | 859 | - | 540,702 | 540,702 |
| Equity instruments | - | - | 10,604 | - | 10,604 | 10,604 |
| Financial assets, total | 5,270,721 | 539,843 | 11,463 | 1,931 | 5,823,958 | 5,823,958 |
| Investments in associated companies | 25,351 | 25,351 | ||||
| Investment properties | 1,328 | 1,431 | ||||
| Other assets | 91,130 | 91,130 | ||||
|---|---|---|---|---|---|---|
| Assets, total | 5,270,721 | 539,843 | 11,463 | 1,931 | 5,941,766 | 5,941,870 |
| Hedging | Booking value, | ||
|---|---|---|---|
| Other liabilities | derivatives | total | Fair value |
| 242,543 | - | 242,543 | 242,543 |
| 3,112,464 | - | 3,112,464 | 3,112,464 |
| - | 4,184 | 4,184 | 4,184 |
| 2,086,950 | - | 2,086,950 | 2,086,950 |
| 40,000 | - | 40,000 | 40,000 |
| 5,481,957 | 4,184 | 5,486,141 | 5,486,141 |
| 90,665 | |||
| 5,576,806 | |||
| 5,481,957 | 4,184 | 90,665 5,576,806 |
| Cash and cash equivalents, total | 682,117 | 402,030 |
|---|---|---|
| Current account in the Bank of Finland | 675,420 | 396,002 |
| Cash in hand | 6,698 | 6,028 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Loans and receivables to credit institutions | ||
| Repayable on demand | 191,805 | 82,630 |
| Other | 500 | 32,026 |
| Loans and receivables from credit institutions, total | 192,305 | 114,655 |
| Loans and receivables from public and public sector entities | ||
| Loans | 5,871,747 | 4,656,941 |
| Utilised overdraft facilities | 65,637 | 53,670 |
| Loans intermediated through the State's assets | 20 | 29 |
| Credit cards | 58,929 | 43,029 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Loans and receivables to credit institutions | ||
| Repayable on demand | 191,805 | 82,630 |
| Other | 500 | 32,026 |
| Loans and receivables from credit institutions, total | 192,305 | 114,655 |
| Loans and receivables from public and public sector entities | ||
| Loans | 5,871,747 | 4,656,941 |
| Utilised overdraft facilities | 65,637 | 53,670 |
| Loans intermediated through the State's assets | 20 | 29 |
| Credit cards | 58,929 | 43,029 |
| Bank guarantee receivables | 741 | 367 |
| Loans and receivables from public and public sector entities, total | 5,997,074 | 4,754,036 |
| Loans and receivables, total | 6,189,379 | 4,868,691 |
Loans and receivables to credit institutions, item Other includes the minimum reserve deposit with the Bank of Finland. The recording policy for the minimum reserve deposit has been changed, and from 30 June 2023, the deposit will be presented as the amount of the balance requirement on the last day of the reporting period.
Reconciliations from the opening and the closing balances of the expected credit losses are presented in Note G24 Impairment losses on financial assets.
| 31 Dec 2023 | 31 Dec 2022 |
|---|---|
| 6.698 | 6,028 |
| 675.420 | 396,002 |
| 682.117 | 402,030 |
| Assets (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Fair value hedge | ||
| Interest rate derivatives | 44,924 | 1,929 |
| Other hedging derivatives | ||
| Share and share index derivatives | - | 2 |
| Derivative assets, total | 44,924 | 1,931 |
| Liabilities (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| Fair value hedge | ||
| Interest rate derivatives | 9,455 | 4,184 |
| Share and share index derivatives | - | - |
Derivative liabilities, total 9,455 4,184 4,184
| accounting (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 | ||
|---|---|---|---|---|
| Book vaue on | of which the | Book value of the | of which the | |
| hedge items | change in the fair value of the hedged items |
hedge item | change in the fair value of the hedged item |
|
| Fair value portfolio hedge | ||||
| Loans and advance to credit | 227,523 | 9,523 | 218,318 | 318 |
| Assets, total | 227,523 | 9,523 | 218,318 | 318 |
| Liabilities to the public and public sector entities |
1,345,014 | 45,014 | 408,554 | -1,446 |
| Liabilities, total | 1,345,014 | 45,014 | 408,554 | -1,446 |
| fair values of derivatives (1,000 euros) | Remaining maturity | Fair values | ||||
|---|---|---|---|---|---|---|
| 31 Dec 2023 | Less than 1 year | 1-5 years | Over 5 years | Total | Assets | Liabilities |
| Fair value hedge | - | 891,000 | 627,000 | 1,518,000 | 44,924 | 9,455 |
| Interest rate swaps | - | 891,000 | 627,000 | 1,518,000 | 44,924 | 9,455 |
| Other hedging derivatives | 12,553 | - | - | 12,553 | - | - |
| Share and share index derivatives | 12,553 | - | - | 12,553 | - | - |
| Derivatives, total | 12,553 | 891,000 | 627,000 | 1,530,553 | 44,924 | 9,455 |
| Nominal values of underlying items and fair values of derivatives (1,000 euros) |
Remaining maturity | Fair values | ||||
|---|---|---|---|---|---|---|
| 31 Dec 2022 | Less than 1 year | 1-5 years | Over 5 years | Total | Assets | Liabilities |
| Fair value hedge | 10,000 | 291,000 | 327,000 | 628,000 | 1,929 | 4,184 |
| Interest rate swaps | 10,000 | 291,000 | 327,000 | 628,000 | 1,929 | 4,184 |
| Other hedging derivatives | 31,328 | 12,553 | - | 43,880 | 2 | - |
| Share and share index derivatives | 31,328 | 12,553 | - | 43,880 | 2 | - |
| Derivatives, total | 41,328 | 303,553 | 327,000 | 671,880 | 1,931 | 4,184 |
| Investment assets (1,000 euros) | 31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Measured at fair value through profit or loss | ||
| Debt securities | 1,030 | 859 |
| Shares and other equity instruments | 13,519 | 10,604 |
| Assets measured at fair value through profit or loss, total | 14,549 | 11,463 |
| Measured at fair value through other comprehensive income | ||
| Debt securities | 545,699 | 539,843 |
| Shares and other equity instruments | - | - |
| Measured at fair value through other comprehensive income, total | 545,699 | 539,843 |
| Investment properties | 1,167 | 1,328 |
| Investment assets, total | 561,414 | 552,633 |
| Reconciliations from the opening and the closing balances of the expected credit losses are presented in Note G24 Impairment losses on financial assets. |
||
| Changes in investment properties (1,000 euros) | 31 Dec 2023 31 Dec 2022 | |
| Cost January 1 | 4,199 | 4,544 |
| Cost at the end of the period | 4,058 | 4,199 | |
|---|---|---|---|
| +/- Transfers | -163 | - | |
| - | Decreases | - | -345 |
| + | Increases | 22 | - |
| +/- Accumulated depreciation of decreases and transfers | 40 | - | |
|---|---|---|---|
| - | Depreciation | -59 | -41 |
| Accumulated depreciation and impairment at the end of the period | -2,892 | -2,871 |
| Opening balance | 1,328 | 1,713 |
|---|---|---|
| Closing balance | 1,167 | 1,328 |
| 31 Dec 2022 | 31 Dec 2023 |
|---|---|
| 4,544 | 4,199 |
| 22 | |
| $-345$ | |
| $-163$ | |
| 4,199 | 4,058 |
| $-2,830$ | $-2,871$ |
| 40 | |
| $-41$ | -59 |
| $-2,871$ | $-2,892$ |
| 1,328 | 1,713 |
|---|---|
| 1,167 | 1,328 |
| 31 Dec 2023 | Equity instruments | Debt-based | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Measured at fair value through profit or loss and measured at fair value through other comprehensive income (1,000 euros) |
Fair value through other comprehensive income |
Fair value through profit or loss |
At amortised cost |
Total | Fair value through other comprehensive income |
Fair value through profit or loss |
At amortised cost |
Total | All total |
| Quoted | |||||||||
| Public sector entities | - | - | - | - | 161,872 | - | - | 161,872 | 161,872 |
| From others | - | 4,214 | - | 4,214 | 383,827 | 115 | - | 383,942 | 388,156 |
| Non-quoted | |||||||||
| From others | - | 9,305 | - | 9,305 | - | 915 | - | 915 | 10,220 |
| Total | - | 13,519 | - | 13,519 | 545,699 | 1,030 | - | 546,729 | 560,248 |
| 31 Dec 2022 | Equity instruments | Debt-based | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Measured at fair value through profit or loss and measured at fair value through other comprehensive income |
Fair value through other comprehensive |
Fair value through profit or |
At amortised | Fair value through other comprehensive |
Fair value through profit or |
At amortised | |||
| (1,000 euros) | income | loss | cost | Total | income | loss | cost | Total | All total |
| Quoted | |||||||||
| Public sector entities | - | - | - | - | 158,567 | - | - | 158,567 | 158,567 |
| From others | - | 2,375 | - | 2,375 | 381,071 | 115 | - | 381,186 | 383,561 |
| Non-quoted | |||||||||
| From others | - | 8,229 | - | 8,229 | 205 | 744 | - | 949 | 9,178 |
| Total | - | 10,604 | - | 10,604 | 539,843 | 859 | - | 540,702 | 551,306 |
| cost | Total | All total |
|---|---|---|
228 Annual Report 2023 Contents OmaSp in Brief Sustainability Corporate Governance Report of Board of Directors Financial Statements 229
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Other intangible rights | 5,458 | 6,336 |
| Information systems | 5,487 | 5,912 |
| Customer relationships related to deposits | -29 | 424 |
| Intangible assets on progress | 3,343 | 1,839 |
| Goodwill | 4,837 | 454 |
| Total intangible assets | 13,638 | 8,628 |
| In progress: | Other intangible | |||
|---|---|---|---|---|
| Changes in intangible assets 2023 | intangible assets | rights | Goodwill | |
| Cost January 1 | 1,839 | 16,869 | 454 | |
| + | Increases | 1,504 | - | 4,883 |
| - | Decreases | - | - | -500 |
| +/- Transfers | - | 2,232 | - | |
| Cost December 31 | 3,343 | 19,101 | 4,837 | |
| Accumulated amortisation and impairment loss January 1 | - | -10,533 | - | |
| +/- Accumulated amortisation of decreases and transfers | - | - | - | |
| - | Amortisation | - | -3,109 | - |
| - | Impairment | - | - | - |
| +/- Other changes | - | - | - | |
| Accumulated amortisation and impairment loss December 31 | - | -13,643 | - | |
| Opening balance, January 1 | 1,839 | 6,336 | 454 | |
| Closing balance, December 31 | 3,343 | 5,458 | 4,837 |
| In progress: | Other intangible | ||
|---|---|---|---|
| Changes in intangible assets | intangible assets | rights | Goodwill |
| Cost January 1 | 4,098 | 12,553 | 1,054 |
| + Increases |
-2,259 | 106 | - |
| - Decreases |
- | -140 | -600 |
| +/- Transfers | - | 4,349 | - |
| Cost December 31 | 1,839 | 16,869 | 454 |
| Accumulated amortisation and impairment loss January 1 | - | -7,680 | - |
| +/- Accumulated amortisation of decreases and transfers | - | 96 | - |
| - Amortisation |
- | -2,949 | - |
| - Impairment |
- | - | - |
| +/- Other changes | - | - | - |
| Accumulated amortisation and impairment loss December 31 | - | -10,533 | - |
| Opening balance, January 1 | 4,098 | 4,873 | 1,054 |
| Closing balance, December 31 | 1,839 | 6,336 | 454 |
Most of the Group's goodwill is related to goodwill recognised in connection with the Liedon Savings Bank's business transaction. Impairment testing is based on the current value of the projected cash flows based on the assessment of the Company's management. Forecasted cash flows are taken into account in accordance with the internal capital adequacy assessment procedure for the current and the next three years. The growth assumption used to calculate the terminal value after the forecast period is 2% in line with the inflation target of the European Central Bank. The discount rate (WACC) is 7.6%. When estimating the recoverable amount, any reasonably possible change in any of the key variables used would not lead to a situation where the recoverable amount would fall below the carrying amount being tested.
| (1,000 euros) | 31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Properties in own use | 21,254 | 19,242 |
| Land and water areas | 1,570 | 1,357 |
| Buildings | 19,683 | 17,884 |
| Buildings and constructions, right-of use assets |
11,234 | 7,661 |
| Machinery and equipment | 1,265 | 1,397 |
| Machinery and equipment, right-of use assets |
393 | 209 |
| Other tangible assets | 290 | 290 |
| Assets under construction | 158 | - |
| Tangible assets, total | 34,594 | 28,799 |
| Changes in tangible assets 2023 | Land and water areas |
Buildings | Buildings right of-use assets |
Machinery and equipment |
Machinery and equipment, right-of-use assets |
Other tangible assets |
Assets under construction |
|---|---|---|---|---|---|---|---|
| Cost January 1 | 1,370 | 30,480 | 13,884 | 12,418 | 905 | 290 | - |
| + Increases |
- | 1,069 | 7,530 | 272 | 400 | - | 158 |
| - Decreases |
- | -134 | -1,106 | - | -42 | - | - |
| +/- Other changes | 213 | 1,135 | - | - | - | - | - |
| +/- Transfers | - | 1,077 | - | 139 | - | - | - |
| Cost December 31 | 1,583 | 33,626 | 20,307 | 12,828 | 1,264 | 290 | 158 |
| Accumulated depreciation and impairment loss January 1 |
-13 | -12,596 | -6,223 | -11,020 | -696 | - | - |
| Accumulated depreciation of +/- decreases and transfers |
- | 32 | 445 | - | 13 | - | - |
| - Depreciation |
- | -1,258 | -3,295 | -542 | -188 | - | - |
| - Impairment |
- | -46 | - | - | - | - | - |
| +/- Other changes | - | -73 | - | - | - | - | - |
| Accumulated depreciation and impairment loss December 31 |
-13 | -13,942 | -9,073 | -11,562 | -871 | - | - |
| Opening balance January 1 | 1,357 | 17,884 | 7,661 | 1,397 | 209 | 290 | - |
| Opening balance December 31 | 1,570 | 19,684 | 11,234 | 1,265 | 393 | 290 | 158 |
| Machinery |
|---|
| and |
| Land and | Buildings right | Machinery and |
equipment, right-of-use |
Other tangible |
Assets under | ||
|---|---|---|---|---|---|---|---|
| Changes in tangible assets 2022 | water areas | Buildings | of-use assets | equipment | assets | assets | construction |
| Cost January 1 | 1,370 | 31,658 | 10,572 | 11,997 | 672 | 293 | - |
| + Increases |
- | 153 | 4,720 | 405 | 255 | - | - |
| - Decreases |
- | -2,112 | -1,408 | -57 | -22 | -3 | - |
| +/- Transfers | - | 781 | - | 72 | - | - | - |
| Cost December 31 | 1,370 | 30,480 | 13,884 | 12,418 | 905 | 290 | - |
| Accumulated depreciation and | |||||||
| impairment loss January 1 | -13 | -13,071 | -4,521 | -10,536 | -534 | - | - |
| Accumulated depreciation of | |||||||
| +/- decreases and transfers |
- | 276 | 693 | 27 | 13 | - | - |
| - Depreciation |
- | -1,239 | -2,394 | -511 | -175 | - | - |
| - Impairment |
- | 1,438 | - | - | - | - | - |
| Accumulated depreciation and | |||||||
| impairment loss December 31 | -13 | -12,596 | -6,223 | -11,020 | -696 | - | - |
| Opening balance January 1 | 1,357 | 18,586 | 6,051 | 1,461 | 138 | 293 | - |
| Opening balance December 31 | 1,357 | 17,884 | 7,661 | 1,397 | 209 | 290 | - |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Receivables on payment transfers | 67 | 94 |
| Pension funds | 82 | - |
| Accrued income | 62,614 | 26,029 |
| Interests | 53,691 | 21,300 |
| Other advance payments | 4,155 | 649 |
| Other accrued income | 4,767 | 4,081 |
| Other | 12,335 | 5,654 |
| Other assets, total | 75,097 | 31,778 |
The item Pension assets consists of defined benefit pension plans, which are described in more detail in note G28 Pension liabilities.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|---|
| Tax assets | |||||
| Deferred tax assets | 17,610 | 21,924 | |||
| Tax assets, total | 17,610 | 21,924 | |||
| Tax liabilities | |||||
| Current income tax liabilities | 2,580 | 482 | |||
| Deferred tax liabilities | 42,899 | 36,072 | |||
| Tax liabilities, total | 45,479 | 36,554 | |||
| Recognised | Other | ||||
| Deferred tax assets 2023 | through profit | comprehensive | Business | ||
| (1,000euros) | 1.1. | or loss | income | acquisitions | 31.12. |
| Assets at fair value through other comprehensive income | 19,215 | - | -3,658 | - | 15,557 |
| Tangible assets | 347 | 133 | - | - | 480 |
| Defined benefit pension plans | 41 | -3 | -38 | - | - |
| Other items | 2,284 | -754 | - | - | 1,530 |
| Lease liabilities | 1,615 | 758 | - | - | 2,372 |
| Deferred tax assets before netting, total | 23,501 | 134 | -3,697 | - | 19,939 |
| Netting of deferred tax assets and liabilities | -1,577 | -751 | - | - | -2,328 |
| Deferred tax assets, total | 21,924 | -617 | -3,697 | - | 17,610 |
| Recognised | Other | ||||
|---|---|---|---|---|---|
| through profit | comprehensive | Business | |||
| Deferred tax liabilities 2023 (1,000 euros) | 1.1. | or loss | income | acquisitions | 31.12. |
| On taxable reserves | 35,771 | 6,657 | - | - | 42,428 |
| Assets at fair value through other comprehensive income | 89 | - | 28 | - | 118 |
| Defined benefit pension plans | - | 16 | - | - | 16 |
| Liabilities | 100 | -100 | - | - | - |
| Other items | 112 | 226 | - | - | 338 |
| Fixed assets items | 1,577 | 751 | - | - | 2,328 |
| Deferred tax liabilities before netting, total | 37,649 | 7,550 | 28 | - | 45,228 |
| Netting of deferred tax assets and liabilities | -1,577 | -751 | - | - | -2,328 |
| Deferred tax liabilities, total | 36,072 | 6,799 | 28 | - | 42,899 |
| Recognised | Other | ||||
|---|---|---|---|---|---|
| through profit | comprehensive | Business | |||
| Deferred tax assets 2022 (1,000 euros) | 1.1. | or loss | income | acquisitions | 31.12. |
| Assets at fair value through other comprehensive income | 1,436 | - | 17,779 | - | 19,215 |
| Tangible assets | 262 | 84 | - | - | 347 |
| Defined benefit pension plans | 118 | -4 | -73 | - | 41 |
| Confirmed losses | 217 | -46 | -170 | - | - |
| Liabilities | 1,300 | - | - | -1,300 | - |
| Other items | 3,716 | -809 | -624 | - | 2,284 |
| Lease liabilities | 1,267 | 347 | - | - | 1,615 |
| Deferred tax assets before netting, total | 8,317 | -427 | 16,911 | -1,300 | 23,501 |
| Netting of deferred tax assets and liabilities | -1,241 | -336 | - | - | -1,577 |
| Deferred tax assets, total | 7,077 | -763 | 16,911 | -1,300 | 21,924 |
| Recognised through profit |
Other comprehensive |
Business | |||
|---|---|---|---|---|---|
| Deferred tax liabilities 2022 (1,000 euros) | 1.1. | or loss | income | acquisitions | 31.12. |
| On taxable reserves | 29,496 | 6,275 | - | - | 35,771 |
| Assets at fair value through other comprehensive income | 1,314 | - | -1,224 | - | 89 |
| Liabilities | 200 | -100 | - | - | 100 |
| Other items | 113 | 78 | -79 | - | 112 |
| Fixed assets items | 1,241 | 336 | - | - | 1,577 |
| Deferred tax liabilities before netting, total | 32,363 | 6,590 | -1,303 | - | 37,649 |
| Netting of deferred tax assets and liabilities | -1,241 | -336 | - | - | -1,577 |
| Deferred tax assets, total | 31,122 | 6,254 | -1,303 | - | 36,072 |
| 21,924 |
|---|
| 21,924 |
| 36,554 |
|---|
| 36,072 |
| 482 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Liabilities to credit institutions | ||
| Liabilities to Central Banks | 30,000 | 150,000 |
| Repayable on demand | 4,420 | 4,749 |
| Other than repayable on demand | 130,835 | 87,794 |
| Liabilities to credit institutions, total | 165,255 | 242,543 |
| Liabilities to the public and public sector entities | ||
| Deposits | 3,733,280 | 3,113,883 |
| Repayable on demand | 3,160,301 | 2,817,464 |
| Other | 572,979 | 296,420 |
| Other financial liabilities | 16 | 27 |
| Other than repayable on demand | 16 | 27 |
| Changes in fair value in terms of borrowing | 45,014 | -1,446 |
| Liabilities to the public and public sector entities, total | 3,778,310 | 3,112,464 |
| Liabilities to the public and public sector entities and liabilities to credit | ||
| institutions, total | 3,943,565 | 3,355,007 |
The Liabilities to Central Banks item is a secured LTRO credit raised in September 2023. In the comparison periods, the item consisted of TLTRO credit raised in June 2020, which matured on 30 June 2023. The TLTRO credit was treated as a liability in accordance with IFRS 9 and the interest rate on the loan was revised after the loan was due.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Bonds | 2,758,725 | 1,941,269 |
| Certificates of deposit | 171,333 | 145,681 |
| Debt securities issued to the public, total | 2,930,058 | 2,086,950 |
| Nominal value | Closing balance | |||||
|---|---|---|---|---|---|---|
| Bond | 31 Dec 2023 | Interest | Year of issue | Due date | 31 Dec 2023 31 Dec 2022 | |
| OmaSp Plc 3.4.2024, covered bond |
300,000 | 0.125%/fixed | 2019 | 4/3/2024 | 299,914 | 299,579 |
| OmaSp Plc 6.4.2024, covered bond |
250,000 | 0.125%/fixed | 2020 | 4/6/2023 | - | 249,883 |
| OmaSp Plc 17.1.2024 | 55,000 | 0.125%/fixed | 2020 | 1/17/2024 | 55,000 | 54,999 |
| OmaSp Plc 25.11.2027, covered bond |
650,000 margin 1%/variable | 2020-2021 | 11/25/2027 | 622,126 | 403,908 | |
| OmaSp Plc 19.5.2025 | 200,000 | 0.01%/fixed | 2021 | 5/19/2025 | 199,782 | 199,625 |
| OmaSp Plc 18.12.2026, covered bond |
600,000 | margin 0.2%/variable |
2022 | 12/18/2026 | 587,613 | 583,684 |
| OmaSp Plc 26.9.2024 | 150,000 | 1.5%/fixed | 2022 | 9/26/2024 | 149,802 | 149,591 |
| OmaSp Plc 15.6.2028, covered bond |
350 000 | 3.125%/fixed | 2023 | 6/15/2028 | 347,641 | - |
| OmaSp Plc 15.1.2029, covered bond |
500,000 | 3.5%/fixed | 2023 | 1/15/2029 | 496,848 | - |
2,758,725 1,941,269
| Maturity of deposit certificates |
Less than 3 months |
3-6 months | 6-9 months | 9-12 months | Closing balance, total |
|---|---|---|---|---|---|
| 31 Dec 2023 | 99,464 | 62,221 | - | 9,648 | 171,333 |
| 31 Dec 2022 | 133,777 | 11,904 | - | - | 145,681 |
G14 Subordinated liabilities
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 | ||
|---|---|---|---|---|
| Debentures | 60,000 | 40,000 | ||
| Subordinated liabilities, total | 60,000 | 40,000 | ||
| Details of liabilities (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 | Interest % | Due date |
| OmaSp debenture loan I/2022 | 20,000 | 20,000 | 3.00% | 1/15/2028 |
| OmaSp debenture loan II/2022 | 20,000 | 20,000 | 3.25% | 7/14/2028 |
| OmaSp debenture loan I/2023 | 20,000 | - | 3.25% | 10/23/2028 |
| Total | 60,000 | 40,000 | ||
| Amount included in own funds (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| OmaSp debenture loan II/2022 | 18,149 | 20,000 |
|---|---|---|
| OmaSp debenture loan I/2023 | 19,255 | - |
| Total | 53,571 | 40,000 |
Terms and conditions of prepayment: The Group retains on all loans the right to claim the loan either partially or in full before the due date. However, prepayment is only possible if permitted by the Finnish Financial Supervisory Authority, excluding minor claims that the Company will resell shortly after claiming. In the last quarter, the Company redeemed the OmaSp debenture loan I/2017 before the maturity date of 1 February 2023.
Regulations on loan priorities and potential exchanging of loans for shares: Loans have been issued as a debenture loan in accordance with Article 34 of the Promissory Notes Act (622/47). These loans are subordinated to the issuer's other loans.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Provisions | ||
| Pension provisions | - | 206 |
| Expected credit loss from irrevocable commitments given in favour of | ||
| a customer | 269 | 297 |
| Provisions total | 269 | 503 |
| Other liabilities | ||
| Liabilities on payment transfers | 20,616 | 16,647 |
| Accruals | 45,156 | 18,062 |
| Interest payable | 33,954 | 8,198 |
| Advance interest payments received | 619 | 1,702 |
| Other accruals | 10,321 | 7,992 |
| Advance payments received | 261 | 170 |
| Other | 47,256 | 18,899 |
| Payment liability, consortium of Savings Banks | 19,500 | 5,200 |
| Other liabilities | 27,756 | 13,699 |
| Other liabilities total | 113,028 | 53,608 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Provisions | ||
| Pension provisions | - | 206 |
| Expected credit loss from irrevocable commitments given in favour of a customer |
269 | 297 |
| Provisions total | 269 | 503 |
| Other liabilities | ||
| Liabilities on payment transfers | 20,616 | 16,647 |
| Accruals | 45,156 | 18,062 |
| Interest payable | 33,954 | 8,198 |
| Advance interest payments received | 619 | 1,702 |
| Other accruals | 10,321 | 7,992 |
| Advance payments received | 261 | 170 |
| Other | 47,256 | 18,899 |
| Payment liability, consortium of Savings Banks | 19,500 | 5,200 |
| Other liabilities | 27,756 | 13,699 |
| Other liabilities total | 113,028 | 53,608 |
| Provisions and other liabilities total | 113,297 | 54,111 |
| Changes in provisions (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| Provisions January 1 | 503 | 1,515 |
| Increase/decrease in defined benefit pension plans | -206 | -383 |
| Increase in expected credit loss from irrevocable commitments given in | ||
| favour of a customer | -28 | -629 |
| Provisions December 31 | 269 | 503 |
The provision item Pension provisions consists of defined benefit pension plans, which are described in more detail in note G28 Pension liabilities.
G16 Equity
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Share capital | 24,000 | 24,000 |
| Other reserves | 148,822 | 68,822 |
| Fair value reserve | -61,756 | -76,503 |
| Measured at fair value | -61,756 | -76,503 |
| Reserve for invested non-restricted equity | 210,197 | 145,196 |
| Other reserves | 380 | 128 |
| Retained earnings | 368,230 | 272,139 |
| Retained earnings (loss) | 258,180 | 216,757 |
| Profit (loss) for the accounting period | 110,051 | 55,382 |
| Equity, total | 541,052 | 364,961 |
| Shareholders of Oma Savings Bank Plc | 541,052 | 364,961 |
| Equity, total | 541,052 | 364,961 |
| Movements in the fair value reserve | 31 Dec 2023 | 31 Dec 2022 |
| Fair value reserve January 1 | -76,503 | -492 |
| Change in fair value, other financial instruments | 18,393 | -94,294 |
| Expected credit loss on debt securities | 40 | -720 |
| Deferred taxes | -3,687 | 19,003 |
| Fair value reserve December 31 | -61,756 | -76,503 |
The number of Oma Savings Bank Plc's shares is 33,275,237 pc, of which 201,386 shares were held in the Company's own possession as of 31 December 2023. The number of votes per share is 1 vote / share. The share has no nominal value. The Company has no different share classes. All shares have equal dividend rights and other rights.
In November, the Company completed a repurchase program related to the acquisition of its own shares, which began in September. During the period, 100,000 shares of own shares were acquired at an average price of EUR 20,5419 per share.
In February, the Company's Board of Directors confirmed the fulfilment of the 2020-2021 share-based incentive scheme's earning criteria and the payment of 331,790 shares, including the amount to be paid in cash. The share rewards will be paid in four installments within three years. During the 2023 financial year, the Company disposed of a total of 57,396 shares to key persons.
In February, the Company's Board of Directors decided on the fulfillment of the years 2022-2023 share-based incentive scheme's earning criteria for the year 2022, and on the reward criteria and target levels for the year 2023.
The system's target group includes a maximum of 30 key personnel, including the Company's CEO and members of the Group's Management Team. The fees payable under the scheme correspond to a maximum value of 400,000 shares of Oma Savings Bank Plc, including the amount to be paid in cash.
On 30 March 2023, the Annual General Meeting has authorised the Board to decide on the issue or transfer of the Company's shares, as well as on the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Companies Act. The number of shares to be issued under the authorisation, including shares to be received on the basis of special rights, may not exceed a total of 4,000,000 shares; and to decide on the repurchase of a maximum of 1,000,000 of the company's own shares with the company's unrestricted equity. The authorisations are valid until the end of the next Annual General Meeting, however, not later than 30 June 2024.
On 22 September 2022, the Board of Directors decided to carry out a paid directed share issue. All new shares of Oma Savings Bank Plc to be issued in the share issue, 3,125,049, were issued to Liedon Savings Bank as consideration for the business to be transferred when the implementation of the transfer of Liedon Savings Bank's business under the acquisition plan is registered in the
Trade Register, which is scheduled to take place on 28 February 2023.
The fair value reserve includes the change in fair value of financial assets at fair value through other comprehensive income less deferred taxes. The items recognised in the reserve are transferred to the income statement when a security held for trading is sold or when impairment is recognised.
The assets raised in the institutional and public offerings and personnel offerings in 2017–2018 are entered in the reserve for invested non-restricted equity. In addition, the reserve for invested non-restricted equity includes the assets gained from issued shares in connection with reorganisations in previous accounting periods. During the financial period 2023, EUR 65.0 million of directed share issued to Liedon Savings Bank was recorded in the reserve for invested non-restricted equity.
Retained earnings are earnings accumulated over previous accounting periods that have not been distributed as dividends to owners. Retained earnings also include voluntary reserves included in the separate financial statements and the depreciation difference, minus deferred tax liabilities.
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Interest income | ||
| Receivables from credit institutions | 11,627 | 1,377 |
| Receivables from public and public sector entities | 266,459 | 108,840 |
| Debt securities | 5,102 | 3,104 |
| Derivatives | 37,613 | 6,947 |
| Other interest income | 1,705 | 1,608 |
| Total interest income | 322,506 | 121,876 |
| Liabilities to credit institutions | -5,099 | -1,283 |
| Interest expenses | ||
| Liabilities to the public and public sector entities | -22,216 | -1,524 |
| Debt securities issued to the public | -54,488 | -10,907 |
| Subordinated liabilities | -1,754 | |
| -354 | ||
| Derivatives | -40,775 | -2,742 |
| Other interest expenses | -1,130 | -136 |
| Total interest expenses | -125,461 | -16,946 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Fee and commission income | ||
| Lending | 10,156 | 11,925 |
| Deposits | 107 | 77 |
| Card and payment transactions | 33,713 | 24,440 |
| Intermediated securities | - | 259 |
| Funds | 6,517 | 4,485 |
| Legal services | 483 | 422 |
| Brokered products | 2,469 | 2,025 |
| Granting of guarantees | 2,094 | 1,865 |
| Other fee and commission income | 1,082 | 771 |
| Total fee and commission income | 56,621 | 46,270 |
| Fee and commission income and expenses, net | 47,421 | 39,396 |
|---|---|---|
| Total fee and commission expenses | -9,200 | -6,873 |
| Other fee and commission expenses | -1,105 | -1,172 |
| Securities | -1,442 | -246 |
| Card and payment transactions | -6,653 | -5,455 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Net income on financial assets measured at fair value through profit or loss | ||
| Debt securities | ||
| Valuation gains and losses | 25 | -136 |
| Total debt securities | 25 | -136 |
| Shares and other equity instruments | ||
| Dividend income | 217 | 449 |
| Capital gains and losses | - | -203 |
| Valuation gains and losses | -2,782 | -4,828 |
| Total shares and other equity instruments | -2,564 | -4,582 |
| Net income on financial assets measured at fair value through profit or loss, | -2,540 | -4,718 |
| total Net income on financial assets measured at fair value through other comprehensive income |
||
| Debt securities | ||
| Capital gains and losses | 610 | -500 |
| Difference in valuation reclassified from the fair value reserve to the | ||
| income statement | -422 | 97 |
| Total debt securities | 188 | -403 |
| Net income on financial assets measured at fair value through other | 188 | -403 |
| comprehensive income, total | ||
| Net income from investment properties (1,000 euros) | 1-12/2023 | 1-12/2022 |
| Rent and dividend income | 235 | 202 |
| Capital gains and losses | - | -3 |
| Other gains from investment properties | 11 | 7 |
| 1-12/2022 | |
|---|---|
| 235 | 202 |
| - | -3 |
| 11 | 7 |
| -90 | -53 |
| -59 | -41 |
| -10 | -10 |
| 87 | 103 |
| 130 | |
| -414 | |
| -4 | |
| -1,875 | -5,306 |
| 1-12/2023 -83 779 -306 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Rent income from properties in own use | 388 | 359 |
| Other income from banking operations | 4,089 | 4,736 |
| Other | - | 276 |
| Total other operating income | 4,476 | 5,371 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Salaries and rewards | -26,350 | -21,585 |
| Pensions | -3,989 | -3,404 |
| Defined contribution plans | -4,087 | -3,422 |
| Defined benefit plans | 98 | 19 |
| Share-based incentive scheme payments | 1,572 | 1,298 |
| Other social security expenses | -843 | -625 |
| Personnel expenses, total | -29,611 | -24,316 |
| Number of employees December 31 | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Full time | 389 | 294 |
| Part time | 6 | 1 |
| Temporary | 69 | 62 |
| Total | 464 | 357 |
| Average number of employees in accounting period | 445 | 352 |
Details about the employment benefits and loans of the related parties are presented in Note G31 Management compensation and related party transactions.
| Other | -4,121 | -5,677 |
|---|---|---|
| Monitoring, control and membership fees | -820 | -772 |
| Insurance and security expenses | -5,611 | -4,748 |
| Expenses from properties in own use | -1,758 | -1,424 |
| Rent expenses | -532 | -1,213 |
| Marketing expenses | -3,410 | -2,138 |
| Telephony expenses | -1,682 | -1,442 |
| Data administration and IT expenses | -19,936 | -18,942 |
| Office expenses | -11,820 | -3,031 |
| Other personnel expenses | -2,827 | -1,816 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Other personnel expenses | -2,827 | -1,816 |
| Office expenses | -11,820 | -3,031 |
| Data administration and IT expenses | -19,936 | -18,942 |
| Telephony expenses | -1,682 | -1,442 |
| Marketing expenses | -3,410 | -2,138 |
| Rent expenses | -532 | -1,213 |
| Expenses from properties in own use | -1,758 | -1,424 |
| Insurance and security expenses | -5,611 | -4,748 |
| Monitoring, control and membership fees | -820 | -772 |
| Other | -4,121 | -5,677 |
| Other operating expenses, total | -52,517 | -41,203 |
Auditors' fees
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| KPMG Oy Ab | ||
| Statutory audit | 313 | 305 |
| Services related to auditing | - | 11 |
| Services related to acquisitions | 10 | 24 |
| Tax advice | 4 | 2 |
| Other services | 33 | 81 |
| Total | 360 | 423 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| KPMG Oy Ab | ||
| Statutory audit | 313 | 305 |
| Services related to auditing | - | 11 |
| Services related to acquisitions | 10 | 24 |
| Tax advice | 4 | 2 |
| Other services | 33 | 81 |
| Total | 360 | 423 |
| The Financial Stability Authority has confirmed payments: | ||
| Deposit Guarantee Fund's payment | -2,743 | -2,266 |
| from which paid amount from the old Deposit Guarantee Fund | ||
| (VTS Fund) | -2,743 | -2,266 |
| The Company's estimate of how many years funds can be transferred from | ||
| VTS Fund concerning Oma Savings Bank Plc. | 2 | 3 |
| Resolution Fund contribution | -2,227 | -1,968 |
| 1-12/2023 | 1-12/2022 |
|---|---|
| $-506$ | $-430$ |
| $-3,295$ | $-2,394$ |
| $-542$ | $-511$ |
| $-188$ | -175 |
| $-3.891$ | $-3,759$ |
| $-274$ | |
| $-8,422$ | $-7,543$ |
| Total depreciation, amortisation and impairment losses | -8,422 | -7,543 |
|---|---|---|
| Impairment loss on properties in own use | - | -274 |
| Intangible assets | -3,891 | -3,759 |
| From machinery and equipment, right-of-use assets | -188 | -175 |
| Machinery and equipment | -542 | -511 |
| From buildings, right-of-use assets | -3,295 | -2,394 |
| On buildings | -506 | -430 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
| (1,000 euros) | 1-12/2023 1-12/2022 1-12/2022 | |
|---|---|---|
| ECL on receivables from customers and off-balance | ||
| sheet items | 1,926 | 1,343 |
| ECL from debt instruments | -40 | 720 |
| Expected credit losses, total | 1,885 | 2,063 |
| Final credit losses | ||
| Final credit losses | -20,760 | -4,348 |
| Refunds on realised credit losses | 1,748 | 538 |
| Recognised credit losses, net | -19,012 | -3,810 |
Reconciliations from the opening and closing balances of the expected credit losses have been formed from 1 January 2023 and 31 December 2023 on the basis of changes in euro denominated loan exposures and expected credit losses.
| 1-12/2023 1-12/2022 | |||||
|---|---|---|---|---|---|
| Receivables from credit institutions and from public and public sector entities (1,000 euros) |
Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Expected credit losses 1 January | 1,300 | 4,974 | 18,558 | 24,833 | 28,599 |
| Transfer to stage 1 | -1 | -483 | -98 | -583 | -1,221 |
| Transfer to stage 2 | -128 | 840 | -390 | 321 | 2,615 |
| Transfer to stage 3 | -27 | -610 | 6,110 | 5,473 | 2,354 |
| New debt securities | 586 | 1,220 | 5,689 | 7,496 | 1,115 |
| Matured debt securities | -176 | -417 | 8,583 | 7,990 | -2,327 |
| Realised credit losses | - | - | -20,760 | -20,760 | -4,114 |
| Recoveries on previous realised credit losses | - | - | 1,748 | 1,748 | 462 |
| Changes in credit risk | 369 | 567 | 942 | 1,878 | 2,291 |
| Changes in calculation model | -597 | 87 | 410 | -100 | -2,338 |
| Changes based on management estimates | 328 | 8,002 | -1,169 | 7,161 | -2,603 |
| Expected credit losses period end | 1,655 | 14,180 | 19,624 | 35,458 | 24,833 |
The Company's management has assessed the effects of the corona pandemic and the Russian invasion war on an industryby-industry basis. In the first quarter, an additional ECL allowance based on management's judgement was released by EUR 0.9 million. During the reporting period, an additional allowance of EUR 0.7 million for LGD was released. The fair value adjustment recorded in connection with the acquisition of Liedon Savings Bank based on management's judgement has been allocated in the second quarter of EUR 0.7 million. In the last quarter, the Company updated its ECL calculation models, the change increased the amount of ECL by EUR 0.8 million. In the last quarter, an additional allowance of EUR 1.0 million was recorded, based on management's judgement, to prepare the Company for the uncertainty of the economic environment. At the end of the financial year, additional loss allowances based on the management's judgement remain for the use in total EUR 8.3 million.
During the first quarter, the Company has refined the allocation of expected credit losses between levels using the flow calculation, and this has caused changes to the allocation of the initial balances at the time of reporting between levels 1 and 2. The total amount of expected credit losses has not changed with the change.
| 1-12/2023 1-12/2022 | |||||
|---|---|---|---|---|---|
| Off-balance sheet commitments (1,000 euros) | Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Expected credit losses 1 January | 141 | 156 | - | 297 | 926 |
| Transfer to stage 1 | -3 | 159 | - | 156 | -63 |
| Transfer to stage 2 | 13 | 66 | - | 79 | 160 |
| Transfer to stage 3 | -1 | -8 | - | -9 | -3 |
| New debt securities | 58 | 82 | - | 140 | 304 |
| Amortisations and matured debt liabilities | -14 | 79 | - | 65 | -287 |
| Realised credit losses | - | - | - | - | - |
| Recoveries on previous realised credit losses | - | - | - | - | - |
| Changes in credit risk | 52 | 162 | - | 214 | -33 |
| Changes in the ECL model parameters | -172 | -554 | - | -726 | -659 |
| Changes based on management estimates | 2 | 50 | - | 53 | -49 |
| Expected credit losses period end | 78 | 192 | - | 269 | 297 |
| 1-12/2023 1-12/2022 | |||||
|---|---|---|---|---|---|
| Debt securities (1,000 euros) | Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Expected credit losses 1 January | 415 | 23 | - | 438 | 1,158 |
| Transfer to stage 1 | - | - | - | - | -13 |
| Transfer to stage 2 | -6 | 29 | - | 23 | 9 |
| Transfer to stage 3 | - | - | - | - | - |
| New debt securities | 280 | 333 | - | 613 | 33 |
| Matured debt securities | -296 | -333 | - | -629 | -127 |
| Realised credit losses | - | - | - | - | - |
| Recoveries on previous realised credit losses | - | - | - | - | - |
| Changes in credit risk | 38 | -4 | - | 34 | -622 |
| Changes in calculation model | - | - | - | - | - |
| Changes based on management estimates | - | - | - | - | - |
| Expected credit losses period end | 430 | 48 | - | 478 | 438 |
| Income tax for accounting period | -20,626 | -6,829 |
|---|---|---|
| Income tax on primary operations | -20,626 | -6,829 |
| Taxes for the previous accounting periods | 69 | - |
| Change in deferred tax assets | -665 | -763 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Income tax for accounting period | -20,626 | -6,829 |
| Income tax on primary operations | -20,626 | -6,829 |
| Taxes for the previous accounting periods | 69 | - |
| Change in deferred tax assets | -665 | -763 |
| Change in deferred tax liabilities | -6,775 | -6,254 |
| Total income taxes | -27,997 | -13,847 |
| Income tax rate | 20% | 20% |
| Accounting profit before taxes | 138,048 | 69,226 |
| Proportion of the result in accordance with tax rate | -27,610 | -13,845 |
| + Tax-exempt income on the income statement | 31 | 142 |
| - Non-deductible expenses on the income statement | -282 | -96 |
| + Deductible expenses not included in the income statement | 32 | 23 |
| - Unrecognised under losses: deferred tax assets | -236 | -70 |
| +/- Taxes for previous accounting periods | 69 | - |
| Taxes on income statement | -27,997 | -13,847 |
| Collaterals given, total | 3,024,020 | 2,100,080 |
|---|---|---|
| Given for own liabilities and provisions | 3,024,020 | 2,100,080 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| Collaterals given |
Collaterals given are loan receivables given as collateral for covered bonds.
Nominal value of covered bonds in the balance sheet is EUR 2,400 million on 31 December 2023.
| (1,000 euros) Property collateral |
31 Dec 2023 5,391,165 |
31 Dec 2022 4,265,604 |
|---|---|---|
| Cash collateral | 21,687 | 13,682 |
| Guarantees received | 270,096 | 236,430 |
| Other | 92,445 | 69,864 |
| Collaterals received, total | 5,775,392 | 4,585,580 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Guarantees | 41,926 | 34,774 |
| Loan commitments | 330,599 | 291,184 |
| Off-balance sheet commitments, total | 372,525 | 325,958 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Expenses on the income statement | 11 | - |
| The current service cost | 5 | 9 |
| Net interest | 6 | 6 |
| Settlements gain | - | -15 |
| Expenses on the statement of comprehensive income | ||
| Remeasurements | -191 | -364 |
| Comprehensive income for the accounting period | -180 | -364 |
| 31 Dec 2023 | 31 Dec 2022 |
|---|---|
| 3,705 |
|---|
| 9 |
| 38 |
| 117 |
| $-941$ |
| $-167$ |
| $-149$ |
| 2.613 |
| 31 Dec 2022 | 31 Dec 2023 |
|---|---|
| Fair value of funds under the plan January 1 | 2,407 | 3,116 |
|---|---|---|
| Interest income | 89 | 32 |
| Return on assets in the plan excl. item belonging in the interest expense/income |
289 | -460 |
| Benefits paid | -165 | -167 |
| Settlements | - | -134 |
| Employer contributions | 109 | 19 |
| Fair value of funds under the plan December 31 | 2,729 | 2,407 |
| 31 Dec 2023 | 31 Dec 2022 | ||
|---|---|---|---|
| 206 |
|---|
| 2,407 |
| 2,613 |
| Liability on the balance sheet December 31 | -82 | 206 |
|---|---|---|
| Fair value of plan assets | 2,729 | 2,407 |
| Present value of obligation | 2,647 | 2,613 |
| 206 |
|---|
| -364 |
| $-19$ |
| 589 |
| Liability on the balance sheet December 31 | -82 | 206 |
|---|---|---|
| Remeasurements in other comprehensive income items | -191 | -364 |
| Payments made into the plan | -109 | -19 |
| Expenses on the income statement | 11 | - |
| Liability on the balance sheet January 1 | 206 | 589 |
| Actuarial assumptions | 2023 | 2022 |
|---|---|---|
| Discount rate, % | 3.30% | 3.75% |
| Wage development, % | 2.80% | 3.10% |
| Increase in pension, % | 2.55% | 2.85% |
| Inflation, % | 2.30% | 2.60% |
| -364 |
|---|
| $-364$ |
| $-15$ |
| 6 |
| 9 |
| 2023 | 2022 Defined Benefit Obligation |
||||
|---|---|---|---|---|---|
| Sensitivity Analysis | Defined Benefit Obligation | ||||
| Effect of a change in assumptions used | Increase | Decrease | Increase | Decrease | |
| Discount rate (0,5% change) | -5.90% | 6.60% | 6.50% | ||
| Future pension increase (0,25% change) | 2.60% | -2.50% | 2.60% | -2.50% | |
| 2023 | |||||
| Sensitivity Analysis | Fair Value of Plan Assets | Fair Value of Plan Assets | |||
| Effect of a change in assumptions used | Increase | Decrease | Increase | Decrease | |
| Discount rate (0,5% change) | -6.00% | 6.70% | -5.60% | 6.20% | |
| Future pension increase (0,25% change) | 0.00% | 0.00% | 0.00% | 0.00% |
Duration based on weighted average of obligations is 12.2 years.
In 2024, the Group expects to pay approximately 230 thousand euros into its defined benefit pension plans.
In addition to the statutory pension scheme, Oma Savings Bank Plc provides defined benefit pension plans to the management team, key personnel in certain key roles, and employees who were members of Säästöpankkien Eläkekassat (Savings Banks' Pension Fund) when its operation ceased on 31 December 1992. For these plans, the retirement age is 60-65 years and the amount of pension is 60% of the salary eligible for pension.
In the pension scheme, the amount of assets describes the part of the obligation for which the insurance company is liable, and it is calculated using the same discount rate as the liability. The assets included in the scheme include 100% acceptable insurance policies. Because the liabilities have been insured, the company is not liable for significant risks. The company remains primarily liable for increases in pensions tied to the employment pension index and the effect of changes in the discount rate and pay increases on the net liabilities.
The assets of defined benefit plans managed in insurance companies are part of the insurance companies' investment assets and the investment risk lies with the insurance company.
| Financial assets 31 Dec 2023 | Recorded financial assets, gross |
Offsetting financial liabilities, gross |
Accounting value on balance sheet, net |
Financial instruments |
Received security collateral |
Received cash | collateral Net amount |
|---|---|---|---|---|---|---|---|
| Derivative assets | 63,990 | - | 63,990 | 18,882 | - | 43,750 | 1,359 |
| Other | - | - | - | - | - | - | - |
| Total financial assets | 63,990 | 1,359 |
| Financial liabilities 31 Dec 2023 |
Recorded financial assets, gross |
Offsetting financial liabilities, gross |
Accounting value on balance sheet, net |
Financial instruments |
Received security collateral |
Received cash | collateral Net amount |
|---|---|---|---|---|---|---|---|
| Derivative liabilities | 18,882 | - | 18,882 | 18,882 | - | - | - |
| Other | - | - | - | - | - | - | - |
| Total financial liabilities | 18,882 | - |
| Financial assets 31 Dec 2022 | Recorded financial assets, gross |
Offsetting financial liabilities, gross |
Accounting value on balance sheet, net |
Financial instruments |
Received security collateral |
Received cash | collateral Net amount |
|---|---|---|---|---|---|---|---|
| Derivative assets | 5,719 | - | 5,719 | 5,470 | - | - | 249 |
| Other | - | - | - | - | - | - | - |
| Total financial assets | 5,719 | 249 |
| Recorded | Offsetting | Accounting value on |
|||||
|---|---|---|---|---|---|---|---|
| Financial liabilities 31 Dec | financial | financial liabilities, | balance sheet, | Financial | Received security | Received cash | |
| 2022 | assets, gross | gross | net | instruments | collateral | collateral Net amount | |
| Derivative liabilities | 6,637 | - | 6,637 | 5,470 | - | - | 1,167 |
| Other | - | - | - | - | - | - | - |
| Total financial liabilities | 6,637 | 1,167 |
The determination of the fair value of financial instruments is set out in Note G1 Accounting principles under "Determining the fair value" of the Financial Statements for the year 2023.
Equity securities recorded to stage 3 include shares in unlisted companies.
| 31 Dec 2023 | ||||
|---|---|---|---|---|
| Financial assets (1,000 euros) | Level 1 | Level 2 | Level 3 | Total |
| At fair value through profit or loss | ||||
| Equity securities | 4,214 | 2,439 | 6,866 | 13,519 |
| Debt securities | 685 | - | 345 | 1,030 |
| Derivatives | - | 44,924 | - | 44,924 |
| At fair value through other comprehensive income | ||||
| Debt securities | 545,465 | - | 234 | 545,699 |
| Financial assets, total | 550,364 | 47,363 | 7,445 | 605,172 |
| 31 Dec 2023 | ||||
| Financial liabilities (1,000 euros) | Level 1 | Level 2 | Level 3 | Total |
| Derivatives | - | 9,455 | - | 9,455 |
| Financial liabilities, total | - | 9,455 | - | 9,455 |
| 31 Dec 2023 | ||||
| Other liabilities (1,000 euros) | Level 1 | Level 2 | Level 3 | Total |
| At fair value through profit or loss | ||||
| Payment liability, consortium of Savings Banks | - | - | 19,550 | 19,550 |
| Total | - | - | 19,550 | 19,550 |
| 31 Dec 2022 | ||||
| Financial assets (1,000 euros) | Level 1 | Level 2 | Level 3 | Total |
| Measured at fair value through profit or loss | ||||
| Equity securities | 2,375 | 2,018 | 6,211 | 10,604 |
| Derivatives | - | 1931 | - | 1,931 |
| Measured at fair value through other comprehensive income | ||||
| Debt securities | 539,843 | - | - | 539,843 |
| Financial assets, total | 542,878 | 3,948 | 6,410 | 553,236 |
| 31 Dec 2022 | ||||
| Financial liabilities (1,000 euros) | Level 1 | Level 2 | Level 3 | Total |
| Derivatives | - | 4,184 | - | 4,184 |
| Financial liabilities, total | - | 4,184 | - | 4,184 |
| 31 Dec 2022 | ||||
| Other liabilities (1,000 euros) | Level 1 | Level 2 | Level 3 | Total |
| At fair value through profit or loss | ||||
| Payment liability, consortium of Savings Banks Total |
- - |
- - |
5,200 5,200 |
5,200 5,200 |
| Investment transactions, categorised to Level 3 | |
|---|---|
| ------------------------------------------------- | -- |
| 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|
| Debt | Equity | Debt | ||
| securities | Total | securities | securities | Total |
| 31 Dec 2023 | 31 Dec 2022 | ||||||
|---|---|---|---|---|---|---|---|
| Financial assets at fair value through profit or loss |
|||||||
| Equity | Debt | Equity | Debt | ||||
| (1,000 euros) | securities | securities | Total | securities | securities | Total | |
| Opening balance | 6,211 | 199 | 6,410 | 7,277 | 269 | 7,546 | |
| + Acquisitions | 743 | 146 | 888 | - | - | - | |
| - Sales | - | - | - | -1,252 | - | -1,252 | |
| - Matured during the year | - | - | - | - | - | - | |
| +/- Realised changes in value recognised on the income statement |
- | - | - | 103 | - | 103 | |
| +/- Unrealised changes in value recognised on the income statement |
-88 | - | -88 | 83 | -70 | 13 | |
| + Transfers to Level 3 | - | - | - | - | - | - | |
| - Transfers to Level 1 and 2 | - | - | - | - | - | - | |
| Closing balance | 6,866 | 345 | 7,211 | 6,211 | 199 | 6,410 |
31 Dec 2023 31 Dec 2022
| Equity securities |
Debt securities |
Total |
|---|---|---|
| income | Equity | Debt | Equity | Debt | ||
|---|---|---|---|---|---|---|
| (1,000 euros) | securities | securities | Total | securities | securities | Total |
| Opening balance | - | - | - | - | - | - |
| + Acquisitions | - | - | - | - | - | - |
| - Sales | - | - | - | - | - | - |
| - Matured during the year | - | - | - | - | - | - |
| +/- Realised changes in value recognised on the income statement |
- | - | - | - | - | - |
| +/- Unrealised changes in value recognised on the income statement |
- | - | - | - | - | - |
| +/- Changes in value recognised in other comprehensive income |
- | -69 | -69 | - | - | - |
| + Transfers to Level 3 | - | 303 | 303 | - | - | - |
| - Transfers to Level 1 and 2 | - | - | - | - | - | - |
| Closing balance | - | 234 | 234 | - | - | - |
Equity securities Debt securities Total
| Other liabilities at fair value through profit or loss (1,000 euros) |
Equity securities |
Debt securities |
Total | Equity securities |
Debt securities |
Total |
|---|---|---|---|---|---|---|
| Opening balance | - | 5,200 | 5,200 | - | 6,500 | 6,500 |
| + Acquisitions | - | 15,000 | 15,000 | - | - | - |
| - Sales | - | - | - | - | - | - |
| - Matured during the year | - | - | - | - | - | - |
| +/- Realised changes in value recognised on the income statement |
- | - | - | - | - | - |
| +/- Unrealised changes in value recognised on the income statement |
- | -650 | -650 | - | -1,300 | -1,300 |
| + Transfers to Level 3 | - | - | - | - | - | - |
| - Transfers to Level 1 and 2 | - | - | - | - | - | - |
| Closing balance | - | 19,550 | 19,550 | - | 5,200 | 5,200 |
| 31 Dec 2023 | 31 Dec 2022 Potential impact on equity |
||||||
|---|---|---|---|---|---|---|---|
| (1,000 euros) | Potential impact on equity | ||||||
| Equity securities | Hypo thetical change |
Market | value Positive Negative | Market | value Positive Negative | ||
| At fair value through profit or loss | +/- 15% | 6,866 | 1,030 | -1,030 | 6,211 | 932 | -932 |
| At fair value through other comprehensive income |
+/- 15 % | - | - | - | - | - | - |
| Total | 6,866 | 1,030 | -1,030 | 6,211 | 932 | -932 | |
| 31 Dec 2023 | 31 Dec 2022 Potential impact on equity |
||||||
|---|---|---|---|---|---|---|---|
| (1,000 euros) | Potential impact on equity | ||||||
| Debt securities | Hypo thetical change |
Market | value Positive Negative | Market | value Positive Negative | ||
| At fair value through profit or loss | +/- 15% | 345 | 52 | -52 | 199 | 30 | -30 |
| At fair value through other comprehensive income |
+/- 15 % | 234 | 35 | -35 | - | - | - |
| Total | 579 | 87 | -87 | 199 | 30 | -30 |
Related parties refer to key personnel in leading positions at Oma Savings Bank Plc and their close family members, as well as subsidiaries, joint ventures and companies, where key personnel in leading positions have control authority or considerable influence, and entities that have significant influence in Oma Savings Bank Plc. Key personnel include Board members, CEO, Deputy CEO and the rest of the Management Team. Loans and guarantees have been granted with conditions that are applied to similar loans and guarantees granted to customers.
| Remuneration received by members of management |
Salaries and rewards | Statutory pension costs | Cost for voluntary supplementary pension |
|||
|---|---|---|---|---|---|---|
| (1,000 euros) | 1-12/2023 | 1-12/2022 | 1-12/2023 | 1-12/2022 | 1-12/2023 | 1-12/2022 |
| Pasi Sydänlammi, CEO | 947 | 947 | 165 | 166 | 188 | 188 |
| Pasi Turtio, Deputy CEO | 381 | 381 | 66 | 67 | 56 | 56 |
| The rest of the Management Team* | 872 | 787 | 152 | 138 | - | - |
| Total | 2,200 | 2,115 | 383 | 371 | 244 | 244 |
* The rest of the Management Team: Juutilainen Helena until 30 March 2023, Liiri Sarianna, Pykäri Pekka from 1 December 2023, Sillanpää Minna, Sirkiä Hanna from 1 April 2023, Tapionsalo Kimmo until 30 November 2023, Rissanen Ville. In addition to the short-term employee benefits and voluntary supplementary pensions indicated in the table above, management has not been paid any other post-employment benefits. The Group's Management Team has been part of two share-based incentive schemes in the 2023 financial year. The share based incentive scheme payments recorded for the 2022 financial year amounted to EUR 460 thousand for the 2020-2021 programme and EUR 838 thousand for the 2022-2023 programme. Further information on the share-based incentive scheme is provided in Note G32.
The CEO and Deputy CEO are entitled to a statutory pension and the retirement age is determined by the statutory earnings-related pension plan. The statutory pension expenditure for the CEO and Deputy CEO in 2023 was altogether EUR 232 thousand (EUR 233 thousand in 2022). The CEO and Deputy CEO have additionally voluntary pension insurance taken out by the company, based on which old-age pension will be paid upon application based on the insurance terms and conditions when the insured is 60 years and 1 month to 70 years of age. The amount of the pension is calculated on the basis of the calculation criteria, the terms of insurance and the price list of the accumulated insurance savings per insurer. In the event of death or permanent incapacity of the insured, a one-off indemnity of 100 percent of the insured's individual insurance savings will be paid to the beneficiary in accordance with the terms of the insurance. The voluntary pension expenses for the CEO and Deputy CEO in 2023 were altogether EUR 244 thousand (EUR 244 thousand in 2022).
| Compensation for Board members | Salaries and rewards | Statutory pension costs | Cost for voluntary supplementary pension |
|||
|---|---|---|---|---|---|---|
| (1,000 euros) | 1-12/2023 | 1-12/2022 | 1-12/2023 | 1-12/2022 | 1-12/2023 | 1-12/2022 |
| Salmi Jarmo, Chairman | 73 | 71 | - | - | - | - |
| Mäkynen Jyrki, Vice Chairman | 59 | 57 | - | - | - | - |
| Hemminki Aila | 45 | 44 | - | - | - | - |
| Jaskari Aki | 42 | 43 | - | - | - | - |
| Kokkala Timo | 42 | 43 | - | - | - | - |
| Partanen Jarmo (until 30 March 2023) | 4 | 43 | - | - | - | - |
| Sandström Jaana | 42 | 43 | - | - | - | - |
| Ossa Jaakko (from 30 March 2023) | 39 | - | - | - | - | - |
| Total | 344 | 342 | - | - | - | - |
31 Dec 2023 31 Dec 2022
| Key personnel | Joint ventures | ||
|---|---|---|---|
| Other related | and their family | and associated | Other related |
| parties | members | companies | parties |
As of 31 December 2023, the Company has the following existing share-based incentive programs:
On 17 February 2020, Oma Savings Bank Plc's Board of Directors decided to set up a share-based incentive scheme for the Group's management. The remuneration is based on comparable cost-income ratio, an increase in operating income (in comparable figures) and customer and employee satisfaction. The program includes the earning period 2020-2021 and subsequent commitment periods, during which the shares will be disposed approximately in four installments within three years. The reward is paid partly in shares of the company and partly in cash. The cash portion is used to cover taxes and tax charges incurred by the reward to the person. If a person's employment or employment relationship ends before the payment of the commission, the remuneration, as a rule, is not paid. The fees payable under the scheme correspond to a total of up to 420,000 Oma Savings Bank Plc shares. The target group of the scheme includes a maximum of 10 persons.
On 24 February 2022, Oma Savings Bank Plc's Board of Directors decided to set up a new share-based incentive scheme for key persons of the Group. The remuneration is based on comparable cost-income ratio, an increase in operating income (in comparable figures) and customer and employee satisfaction. The possible reward is based on a comparable cost-income ratio, an increase in operating income (by comparable figures), and customer and employee satisfaction. The program includes a two-year long earning period, 2022-2023 and subsequent commitment periods, during which the shares will be disposed in approximately six instalments within five years. The reward is paid partly in shares of the company and partly in cash. The cash portion is used to cover taxes and tax charges incurred by the reward to the person. If a person's employment or employment relationship ends before the payment of the commission, the remuneration, as a rule, is not paid. The fees payable under the scheme corresponds to a maximum value of 400,000 shares of Oma Savings Bank Plc, including the amount to be paid in cash. The target group of the scheme includes a maximum of 30 key persons, including the company's CEO and members of the Group's Management Team.
| Share-based incentive scheme | 1-12/2023 | 1-12/2023 | 1-12/2022 |
|---|---|---|---|
| Program | Program | Program | |
| 2022-2023 | 2020-2021 | 2020-2021 | |
| Maximum estimated number of gross shares at the start of the | |||
| scheme | 400,000 | 420,000 | 420,000 |
| Date of issue | 1/1/2022 | 1/1/2020 | 1/1/2020 |
| Share price at issue, weighted average fair value | 16.90 | 8.79 | 8.79 |
| Earning period begins | 1/1/2022 | 1/1/2020 | 1/1/2020 |
| Earning period ends | 12/31/2023 | 12/31/2021 | 12/31/2021 |
| Persons at the close of the financial year | 29 | 10 | 11 |
| Events for the financial year (pcs) | 1-12/2023 | 1-12/2023 | 1-12/2022 |
|---|---|---|---|
| Program | Program | Program | |
| 2023 | 2022-2023 | 2020-2021 | 2020-2021 |
| Those who were out at the beginning of the period | - | 172,190 | - |
| Changes during the period | |||
| Granted during the period | - | - | 331,790 |
| Lost during the period | - | - | - |
| Implemented during the period | - | -57,396 | -159,600 |
| Expired during the period | - | - | - |
| Out at the end of the period | - | 114,794 | 172,190 |
| Assets, premises (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Cost January 1 | 13,884 | 10,572 |
| + Increases (* | 7,530 | 4,720 |
| - Decreases | -1,106 | -1,408 |
| Assets, premises (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Cost January 1 | 13,884 | 10,572 |
| + Increases (* | 7,530 | 4,720 |
| - Decreases | -1,106 | -1,408 |
| Cost at the end of the period | 20,307 | 13,884 |
| Accumulated depreciation and impairment losses January 1 | -6,223 | -4,521 |
| +/- Accumulated depreciation of decreases and transfers | 445 | 693 |
| - Depreciation | -3,295 | -2,394 |
| Accumulated depreciation and impairment losses at the end of the period | -9,073 | -6,223 |
| Opening balance January 1 | 7,661 | 6,051 |
| Closing balance at the end of the period | 11,234 | 7,661 |
| Refundable at the end of the lease | 15 | 15 |
| 15 | 15 |
*) The increases in costs is mainly related to the leases of offices and equipment transferred as a result of the acquisition of Liedon Savings Bank's business.
| Assets, equipment (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Cost January 1 | 905 | 672 |
| + Increases | 400 | 255 |
| - Decreases | -42 | -22 |
| Cost at the end of the period | 1,264 | 905 |
| Assets, equipment (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Cost January 1 | 905 | 672 |
| + Increases | 400 | 255 |
| - Decreases | -42 | -22 |
| Cost at the end of the period | 1,264 | 905 |
| Accumulated depreciation and impairment losses January 1 | -696 | -534 |
| +/- Accumulated depreciation of decreases and transfers | 13 | 13 |
| - Depreciation | -188 | -175 |
| Accumulated depreciation and impairment losses at the end of the period | -871 | -696 |
| Opening balance January 1 | 209 | 138 |
| Closing balance at the end of the period | 393 | 209 |
Closing balance at the end of the period 393 209
| Liabilities (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Lease liabilities at the end of the period | 11,964 | 8,624 |
| less than 1 year | 1–5 years | over 5 years |
|---|---|---|
| 3,345 | 7,840 | 779 |
| 2,673 | 5,740 | 211 |
| 31 Dec 2023 | 31 Dec 2022 |
|---|---|
| 388 | 359 |
| 235 | 202 |
| $-3,295$ | $-2,394$ |
| $-188$ | $-175$ |
| $-225$ | $-112$ |
| $-160$ | $-23$ |
| $-372$ | $-1,190$ |
| $-3,618$ | $-3,334$ |
| Lease expenses total | -3,618 | -3,334 |
|---|---|---|
| Leases of low-value assets | -372 | -1,190 |
| Leases of short-term leases | -160 | -23 |
| Interest expenses | -225 | -112 |
| Equipment | -188 | -175 |
| Premises | -3,295 | -2,394 |
| Depreciation | ||
| Rental income, investment properties | 235 | 202 |
| Rental income, other operating income | 388 | 359 |
| Cash flow from leases | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| -3,351 | -3,169 |
| Domicile | Type of interest | The Group's share of ownership | ||
|---|---|---|---|---|
| 31 Dec 2023 | 31 Dec 2022 | |||
| Kiinteistö Oy Lappeenrannan Säästökeskus | Lappeenranta | Subsidiary | 100.00% | 100.00% |
| GT Invest Oy | Helsinki | Associated company | 48.67% | 48.67% |
| City Kauppapaikat Oy | Helsinki | Associated company | 43.32% | 42.70% |
| Deleway Projects Oy | Seinäjoki | Joint venture | 49.00% | 49.00% |
| Figure Taloushallinto Oy | Espoo | Joint venture | 25.00% | 25.00% |
| SAV-Rahoitus Oyj | Helsinki | Joint venture | 48.21% | 48.21% |
| Asunto Oy Oma Säästöpankin talo | Seinäjoki | Joint operation | 30.46% | 25.54% |
Oma Savings Bank Plc increased its shareholding in housing company Seinäjoen Oma Savings Bank house by acquiring more space for its businesses. The Company's shareholding increased by 4.9% to 30.5% at the end of the financial year.
Oma Savings Bank Plc increased its holding in City Kauppapaikat Oy through a directed share issue. The Company's holding is 43.3% after the arrangement. The value of the investment in the Group's balance sheet is EUR 15.5 million.
Oma Savings Bank Plc estimated the value of the investments of SAV-Rahoitus Oyj and City Kauppapaikat Oy compiled by the equity method, as well as the receivables from the companies, which have been factually processed as part of a net investment in the associated company.
As of 1 June 2022, as a result of changes in ownership and control of SAV-Rahoitus Oyj, the company will be consolidated into the Group as a joint venture. The Group's shareholding is 48.2%.
Oma Savings Bank Plc participated in City Kauppapaikat Oy's directed share issue during the period and as a result the Company's ownership increased by 0.6% to 42.7% at the end of the financial year.
| Value of the investment (1,000 euros) | 31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Figure Taloushallinto Oy | 200 | 200 |
| GT Invest Oy | 6,700 | 5,500 |
| Deleway Projects Oy | 2,000 | 2,000 |
| City Kauppapaikat Oy | 17,800 | 17,800 |
| SAV-Rahoitus Oy | - | 1,520 |
| Total balance sheet value | 26,700 | 27,020 |
| (1,000 euros) | 2023 | 2022 |
|---|---|---|
| Opening balance 1 January | 25,351 | 22,884 |
| Increases | 3,270 | 3,021 |
| Share of profit from associated companies |
-1,131 | -357 |
| Received dividends | - | -197 |
| Impairment losses | -3,359 | - |
| Closing balance 31 December | 24,131 | 25,351 |
In September 2022, the Company's Board of Directors decided to acquire the business of Liedon Savings Bank in accordance with the acquisition plan. In accordance with a decision made by the governing body of Liedon Savings Bank, Liedon Savings Bank transferred its entire business to the Company except for the minor assets mentioned in the acquisition plan. The registration date for the implementation of the business transfer was 28 February 2023. The purchase price of the business acquisition was paid partly by issuing shares and partly in cash.
The values of the assets acquired and liabilities taken to bear were at the time of acquisition:
| Business combination | EUR million |
|---|---|
| Loans and receivables to public and credit institutions |
1,167.0 |
| Accruals and other assets | 45.8 |
| Fixed assets | 5.5 |
| Deposits from public and credit institutions | -1,117.8 |
| Accruals and other liabilities | -11.8 |
| Lease liabilities | -5.5 |
| Liability, consortium of Saving banks | -15.0 |
| Acquired net assets | 68.0 |
| Purchase price, in cash | 7.5 |
| Purchase price, equity instruments | 65.0 |
| Total cost of combination | 72.5 |
| Goodwill | 4.4 |
As a result of the acquisition, EUR 4.4 million was recognised in goodwill. The acquisition of the business is estimated to have a significant positive impact on the Company's annual profitability and is expected to increase the Company's profit before taxes by approximately EUR 15–20 million annually over the next few years. In the longer term, business in the Turku economic area is expected to significantly increase the Company's earnings. Increasing volumes further improve the Company's cost-effectiveness and
business profitability. Goodwill is formed as the difference between the net assets of the acquired business and the purchase price.
In connection with the transitioning of the business, a liability of EUR 15.0 million valued at fair value was recognised in the Company's balance sheet to cover a payment obligation related to the fixed-term liability of Liedon Savings Bank being a credit institution member leaving the consortium of Savings Banks (Act on the Consortium of Deposit Banks 599/2010). The liability is valid for five years.
Assets and liabilities acquired in the business have been measured at fair value. The leases have been valued in accordance with IFRS 16.
The value of the receivables received in the acquisition of the business is approximately EUR 1,167.0 million and a deduction of expected credit losses of EUR 8.0 million has been taken into account for the gross value of the receivables at the time of the acquisition. The effect is presented in Note 12 under "New debt securities".
Cash flow effect of the business acquisition EUR 143.1 million is in the Cash flows from financing activities.
The business income after the acquisition date of the acquired business is included in the Income Statement of the first quarter. According to the management's estimate, Oma Savings Bank Group's operating income would have been EUR 57 million and profit before taxes EUR 27 million in the first quarter of 2023, if the acquired business had been combined in the consolidated financial statements from the beginning of the 2023 financial year.
As part of the acquisition of Liedon Savings Bank's business, the Company carried out the transfer of loans acquired from Sp Mortgage Bank Plc as planned at the beginning of March. The size of the loan portfolio was EUR 233 million. The Company signed an agreement with Sp Mortgage Bank Plc on the transfer of mortgage
credit bank loans (mortgage loans) brokered by Liedon Savings Bank in November 2022.
The acquisition increased the Company's balance sheet by approximately EUR 1.4 billion. Approximately 50,000 private and corporate customers transferred in the acquisition of the business. 93 people transferred as old employees. The total costs of the arrangement were EUR 3.2 million, of which EUR 1.3 million was allocated to year 2022 and EUR 1.9 million to the first quarter in 2023.
In January, Oma Savings Bank's Shareholders' Nomination Committee proposes the Annual General Meeting the number of Board members to be further confirmed at seven. The Shareholders' Nomination Committee proposes that the Board members Aila Hemminki, Aki Jaskari, Jyrki Mäkynen, Jaakko Ossa, Jarmo Salmi and Jaana Sandström to be re-elected and as a new member Essi Kautonen.
Events following the end of the reporting period that would require the presentation of additional information or that would materially affect the Company's financial position are unknown.
Oma Savings Bank Plc's financial reporting presents Alternative Performance Measures (APM) that describe the Company's historical financial result, financial position or cash flows. The APMs are drawn up in line with the guidelines set by the European Securities and Markets Authority (ESMA). APMs are not key figures defined or specified in compliance with IFRS standards, solvency, regulations (CRD/CRR) or Solvency II (SII) regulations. The Company presents APMs as supplementary information to the key figures that are presented in the Group's IFRS-compliant income statement, Group's balance sheets and Group's cash flow statements. •
In the Company's view, alternative key figures provide meaningful and useful information to investors, securities market analysts and others concerning Oma Savings Bank Plc's performance, financial position and cash flows. The reconciliation of the comparable result into profit before taxes is presented in connection with the Group's Income Statement.
Net interest income, net fee and commission income and expenses, net income on financial assets and liabilities, other operating income
Personnel expenses, other operating expenses, depreciation, amortisation and impairment losses on tangible and intangible assets
Minimum liquidity buffer relative to net cash and collateral outflows in a 30-day stress scenario
Total operating expenses without items affecting
Profit/loss before taxes without items effecting comparability
and the end of the year)
| Available amount of stable funding | |
|---|---|
| Required amount of stable funding | X 100 |
Total operating expenses Total operating income + share of profit from joint ventures and associated companies (net) X 100
comparability Total operating income without items affecting comparability X 100
| Profit/loss for the accounting period | |
|---|---|
| Equity (average of the beginning | X 100 |
Comparable profit/loss for the accounting period Equity (average of the beginning and the end of the year) X 100
| Profit/loss of the accounting period | |
|---|---|
| Average balance sheet total | X 100 |
| (average of the beginning and the end of the year) | |
| Equity ratio, % | |
| Equity | X 100 |
| Balance sheet total | |
| Total capital (TC), % | |
| Own funds total (TC) | |
| Risk-weighted assets (RWA) total | X 100 |
| Common Equity Tier 1 (CET1) capital ratio, % | |
| Common Equity Tier 1 (CET1) capital | |
| Risk-weighted assets (RWA) total | X 100 |
| Tier 1 (T1), capital ratio, % | |
| Tier 1 (T1) capital | |
| Risk-weighted assets (RWA) total | X 100 |
| Leverage ratio, % | |
| Tier 1 (T1) capital | |
| Exposures total | X 100 |
Profit/loss for the accounting period belonging to the parent company owners Average number of shares outstanding
Profit/loss for the accounting period belonging to the parent company
Average number of shares outstanding after dilution of share-based rewarding
Comparable profit/loss – Share of non-controlling
interests
Average number of shares outstanding
| P1 Accounting principles for the Parent Company |
266 |
|---|---|
| P2 Categorisation of financial assets and financial liabilities |
274 |
| P3 Loans and receivables to credit institutions and to the public and to public sector entities 275 |
|
| P4 Debt securities | 276 |
| P5 Shares and other equity | 276 |
| P6 Derivative contracts | 277 |
| P7 Intangible assets | 278 |
| P8 Tangible assets | 279 |
| P9 Other assets | 280 |
| P10 Accured income and prepayments | 280 |
| P11 Liabilities to the public and public sector entities and liabilities to credit institutions |
280 |
| P12 Debt securities issued to the public | 281 |
| P13 Provisions and other liabilities | 282 |
| P14 Accured expenses and deferred income | 282 |
| P15 Subordinated liabilities | 282 |
| P16 Deferred tax liabilities and tax assets | 283 |
| P17 Maturity distribution and financial assets and liabilities |
284 |
| P18 Itemisation of asset and liabilities in domestic and foreign denominations |
285 |
| P19 Fair values and book values of financial assets and liabilities and fair value hierarchy |
286 |
| P20 Expected credit losses | 288 |
| P21 Distribution of financial assets by risk rating |
289 |
|---|---|
| P22 Credit risk concentrations | 290 |
| P23 Impact of collaterals and other arrangements improving the quality of loans |
290 |
| P24 Changes in equity during the accounting period |
291 |
| P25 Shares and shareholder right | 293 |
| P26 Interest income and expenses | 294 |
| P27 Income from equity investments | 294 |
| P28 Fee and commission income and expenses 294 | |
| P29 Net income from securities and currency trading |
295 |
| P30 Net income from financial assets recognised at fair value through fair value reserve |
295 |
| P31 Net income on investment properties | 295 |
| P32 Other operating income and expenses | 296 |
| P33 Personnel expenses | 297 |
| P34 Other administration expenses | 297 |
| P35 Depreciation, amortisation and impairment of tangible and intangible assets 297 |
|
| P36 Expected credit losses and loans and other commitments and other financial assets |
298 |
| P37 Liabilities and off-balance sheet commitments |
298 |
| P38 Related party disclosures | 299 |
| P39 Investment services provided by Oma Savings Bank Plc |
299 |
| Oma Savings Bank Plc's Income statement | 263 |
|---|---|
| Oma Savings Bank Plc Balance sheet | 264 |
| Oma Savings Bank Plc Cash flow statement Oma Säästöpankki Oyj rahoituslaskelma |
265 |
| Note | (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|---|
| P26 | Interest income | 322,718 | 121,500 |
| P26 | Interest expenses | -125,236 | -16,812 |
| Net interest income | 197,482 | 104,688 | |
| P27 | Income from equity investments | 217 | 646 |
| P28 | Fee and commission income | 56,621 | 45,694 |
| P28 | Fee and commission expenses | -9,200 | -6,715 |
| P29 | Net income from securities trading and foreign currency trading | -2,529 | -5,454 |
| P30 | Net income from assets at fair value through fair value reserve | 188 | -403 |
| P31 | Net income from investment properties | 93 | 78 |
| P32 | Other operating income | 4,026 | 4,264 |
| Administrative expenses | -68,496 | -52,528 | |
| P33 | Personnel expenses | -28,659 | -24,204 |
| P34 | Other administrative expenses | -39,838 | -28,324 |
| P35 P32 |
Depreciation, amortisation and impairment on tangible and intangible assets Other operating expenses |
-5,227 -16,458 |
-4,339 -15,359 |
| P36 | Expected credit losses and impairment from other financial assets | -17,126 | -1,321 |
| Operating profit | 139,590 | 69,249 | |
| Appropriations | -33,285 | -31,376 | |
| Income taxes | -21,218 | -7,583 | |
| Profit (loss) from ordinary activities after taxes | 85,088 | 30,290 |
Profit (loss) for the period 85,088 30,290
| Note | Assets (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|---|
| Cash and cash equivalents | 682,117 | 402,030 | |
| Debt securities eligible for refinancing with central banks | 512,350 | 502,013 | |
| P3 | Loans and receivables from credit institutions | 192,305 | 114,655 |
| P3 | Loans and receivables from public and public sector entities | 6,002,465 | 4,758,917 |
| P4 | Debt securities | 34,379 | 38,689 |
| Public sector entities | 9,988 | 9,949 | |
| From others | 24,391 | 28,741 | |
| P5 | Shares and other equity | 40,278 | 37,613 |
| P6 | Derivative contracts | 44,924 | 1,931 |
| P7 | Intangible assets | 15,751 | 11,459 |
| P8 | Tangible assets | 17,944 | 16,490 |
| Investment property and shares and interests in investment property | 1,318 | 1,353 | |
| Other property and shares and interests in property companies | 15,104 | 13,484 | |
| Other tangible assets | 1,521 | 1,654 | |
| P10 | Other assets | 12,386 | 5,734 |
| P11 | Accrued income and prepayments | 62,579 | 25,966 |
| P17 | Deferred tax assets | 17,681 | 21,983 |
| Assets, total | 7,635,160 | 5,937,481 |
| Note | Liabilities and equity (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|---|
| Liabilities | |||
| P11 | Liabilities to credit institutions | 165,255 | 242,526 |
| P11 | Liabilities to the public and public sector entities | 3,778,337 | 3,112,489 |
| Deposits | 3,778,321 | 3,112,463 | |
| Other liabilities | 16 | 27 | |
| P12 | Debt securities issued to the public | 2,930,058 | 2,086,950 |
| P6 | Derivative contracts | 9,455 | 4,184 |
| P13 | Other liabilities | 56,200 | 27,699 |
| P14 | Accrued expenses and deferred income | 47,733 | 18,540 |
| P14 | Subordinated liabilities | 60,000 | 40,000 |
| P16 | Deferred tax liabilities | 118 | 89 |
| Liabilities, total | 7,047,155 | 5,532,477 | |
| Appropriations | |||
| P13 | Voluntary provisions | 212,139 | 178,854 |
| Appropriations, total | 212,139 | 178,854 | |
| P23 | Equity | ||
| P24 | Share capital | 24,000 | 24,000 |
| Other restricted reserves | |||
| Fair value reserve | -61,756 | -76,503 | |
| Non-restricted reserves | |||
| Reserve for invested non-restricted equity | 210,289 | 145,288 | |
| Retained earnings (loss) | 118,245 | 103,075 | |
| Profit (loss) for the period | 85,088 | 30,290 | |
| Equity, total | 375,866 | 226,150 | |
| Liabilities and equity, total | 7,635,160 | 5,937,481 |
| Off-balance sheet commitments (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Commitments given to a third party on behalf of a customer | 41,926 | 34,774 |
| Guarantees and pledges | 41,926 | 34,774 |
| Irrevocable commitments given in favour of a customer | 330,627 | 291,191 |
| Undrawn credit facilities | 330,627 | 291,191 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Cash flow from operating activities | ||
| Operating income after taxes | 85,088 | 30,290 |
| End-of-period adjustments* | 87,786 | 23,674 |
| Increase (-) or decrease (+) in receivables from operating activities | -188,191 | -425,079 |
| Debt securities | 58,741 | -17,330 |
| Loans and receivables from credit institutions | 45,052 | -1,391 |
| Loans and receivables from public and public sector entities | -254,335 | -431,372 |
| Shares and other equity | -758 | 10,463 |
| Other assets | -36,890 | 14,551 |
| Increase (+) or decrease (-) in liabilities from operating activities | -547,956 | 259,103 |
| Liabilities to credit institutions | -288,083 | 29,841 |
| Liabilities to the public and public sector entities | -288,508 | 218,254 |
| Other liabilities | 28,635 | 11,008 |
| Paid income taxes | -17,796 | -15,679 |
| Cash flow from operating activities, total | -581,068 | -127,690 |
| Cash flow from investing activities | ||
| Investments in shares and other equity, increases | -3,270 | -1,500 |
| Investments in shares and other equity, decreases | - | 246 |
| Investments in tangible and intangible assets | -6,559 | -3,551 |
| Transfers of tangible and intangible assets | - | 742 |
| Cash flow from investing activities, total | -9,829 | -4,064 |
| Cash flow from financing activities | ||
| Subordinated liabilities, increases | 20,000 | 40,000 |
| Subordinated liabilities, decreases | - | -15,000 |
| Dividends paid | -13,270 | -15,010 |
| Other monetary increases in equity items | -2,054 | -367 |
| Debt securities issued to the public | 832,413 | 353,049 |
| Cash flow from financing activities, total | 837,089 | 362,673 |
| Net change in cash and cash equivalents | 246,192 | 230,919 |
| Cash and cash equivalents at the beginning of the period | 484,660 | 253,741 |
| Cash and cash equivalents at the end of the period | 873,923 | 484,660 |
| Cash and cash equivalents in the cash flow statement consist of the following items: | ||
| Cash and cash equivalents | 682,117 | 402,030 |
| Receivables from credit institutions repayable on demand | 191,805 | 82,630 |
| Total | 873,923 | 484,660 |
| Additional information on the cash flow statement | ||
| Received interests | 290,463 | 110,022 |
| Paid interests | 101,608 | 10,655 |
| Dividends received | 217 | 646 |
| *End-of-period adjustments: | ||
| Appropriations | 33,285 | 31,376 |
| Taxes on income statement | 660 | 2,053 |
| Changes in fair value | 2,266 | 414 |
| Expected credit losses and impairment losses | 17,126 | 1,321 |
Depreciation, amortisation and impairment loss on intangible and tangible assets 5,238 4,352 Other adjustments 29,211 -15,842 Total 87,786 23,674
| 1-12/2023 | 1-12/2022 | |
|---|---|---|
| 85,088 | 30,290 | |
| 87,786 | 23,674 | |
| -188,191 | -425,079 | |
| 58,741 | -17,330 | |
| 45,052 | -1,391 | |
| $-254,335$ | -431,372 | |
| -758 | 10,463 | |
| -36,890 | 14,551 | |
| -547,956 | 259,103 | |
| -288,083 | 29,841 | |
| -288,508 | 218,254 | |
| 28,635 | 11,008 | |
| -17,796 | -15,679 | |
| -581,068 | $-127,690$ | |
| -3,270 | $-1,500$ | |
| 246 | ||
| $-6,559$ | -3,551 | |
| 742 | ||
| -9,829 | -4,064 | |
| 20,000 | 40,000 | |
| -15,000 | ||
| -13,270 | -15,010 | |
| -2,054 | $-367$ | |
| 832,413 | 353,049 | |
| 837,089 | 362,673 | |
| 246,192 | 230,919 | |
| 484,660 | 253,741 | |
| 873,923 | 484,660 | |
| ing items: | ||
| 682,117 | 402,030 | |
| 191,805 | 82,630 | |
| 873,923 | 484,660 | |
| 290,463 | 110,022 | |
| 101,608 | 10,655 | |
| 217 | 646 | |
| 33,285 | 31,376 | |
| 660 | 2,053 | |
| 2,266 | 414 | |
| 17,126 | 1,321 | |
| ıssets | 5,238 | 4,352 |
| 29,211 | -15,842 |
The parent Company Oma Savings Bank Plc draws up separate financial statements in accordance with the provisions of the Accounting Act and Act on Credit Institutions, the Decree of the Ministry of Finance on financial statements and consolidated financial statements of credit institutions (698/2014) and Regulations and Guidelines 2/2016 of the Finnish Financial Supervisory Authority on accounting, financial statements and management reports for the financial sector.
Assets and liabilities tied to items denominated in foreign currencies outside of the euro zone have been converted to euros as per the European Central Bank's closing price on the reporting date. On the income statement, foreign exchange differences that emerged during valuation have been recognised in net gains on trading in foreign currencies.
In connection with initial recognition, the item belonging to financial assets is valued at fair value. If the item is an item not recognised at fair value through profit or loss, the transaction costs immediately resulting from the acquisition of the item are added to it or deducted from it.
Immediately subsequent to the initial recognition, a loss allowance concerning expected credit losses (ECL) is recognised on the financial assets, if the financial asset is valued at amortised cost or through a fair value reserve. Impairments of financial assets are assessed for each receivable and receivable category. Impairments that cannot be allocated to individual receivables are recognised as impairments of a receivable category.
Financial assets are classified in one of the three following categories when they are initially recognised:
The classification and valuation of financial assets is based on the Company's business model and nature of contractual cash flows. Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.
Financial assets are valued at amortised cost when the contractual cash flows only include capital repayments and interest payments, and the Company holds them as part of a business model whose objective is to collect contractual cash flows over the life of the contract. Financial assets valued at amortised cost include receivables from customers and credit institutions and cash assets.
Financial assets are valued at fair value through the fair value reserve when the contractual cash flows consist only of capital repayments and interest payments and the Company holds the financial asset as part of a business model where the objective is to hold financial assets in order to collect the contractual cash flows, but also possibly sell the financial assets before the maturity date. The Company has classified some of its debt securities in this class.
Financial assets are valued at fair value through profit or loss, unless they are valued at amortised cost or at fair value through the fair value reserve. Mainly financial assets whose business model is to trade actively, and
which have been acquired to generate earnings in the short term are recognised at fair value through profit or loss. The Company has classified some of its debt securities in this class.
Equity instruments are recognised at fair value through profit or loss, unless the Company irrevocably chooses to measure an individual asset at fair value through the fair value reserve.
The Company does not have equity-based investments valued at fair value through the fair value reserve. All equity instruments recognised according to IFRS 9 are recognised at fair value through profit and loss.
The Company specifies the business model objective for each portfolio according to how business operations are managed and reported to the management. The objectives are specified on the basis of the investment and lending policy approved by the Company.
The business model describes a portfolio-specific earnings model with the purpose of collecting only contractual cash flows, collecting contractual cash flows and cash flows from sales of financial assets or collecting cash flows from trading in financial assets.
If the business model is other than trading, the Company assesses whether the contractual cash flows are based solely on payment of principal and interest (SPPI test). If the cash flow criterion is not met, the financial asset is recognised at fair value through profit or loss.
In assessing whether contractual cash flows are solely payments of principal and interest, the Company will consider the contractual terms of the instrument. This will include assessing whether the financial asset contains a contractual term that could change the timing or amount of cash flows so that it does not meet the SPPI (solely payments of principal and interest) contractual cash flow characteristics test requirements.
All retail and corporate loans granted by the Company contain a prepayment feature. This feature does meet the
cash flow testing criteria as, in connection with a prematurely repaid loan, the Company is entitled to collect reasonable compensation for the premature termination of the contract.
The Group derecognises financial assets when the contractual rights to cash flows from the financial assets expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group does not retain control of the financial assets.
The impairment estimate, the expected credit loss (ECL), is recognised on all debt instruments belonging to financial assets valued at amortised cost and valued at fair value through the fair value reserve and on off-balance sheet loan commitments and guarantee contracts.
For financial assets valued at amortised cost, a loss allowance for the expected credit loss is recognised in a separate account as a reduction in the carrying amount. The expected credit loss is recognised on the financial assets valued at fair value through the fair value reserve in the fair value reserve. For off-balance-sheet commitments, the expected credit loss is recognised as a provision.
The expected credit losses are calculated for the entire effective period of the financial asset when, on the date of reporting, the credit risk related to the financial asset has significantly increased since its initial recognition (stage 2) or when the contract is impaired (stage 3). Otherwise, the expected credit loss is calculated based on the assessment that default of payment will occur within 12 months of the date of reporting.
The expected credit losses are recognised for each date of reporting and they describe:
The financial assets used in the calculations are classified into three stages, which describe the weakening of the quality of the financial assets compared to the initial recognition.
In assessing whether the credit risk related to a financial instrument has increased significantly, the change in the risk of a default occurring over the expected life of the financial instrument shall be observed. When carrying out this assessment, the entity shall compare the risk of default occurring over the expected life of the instrument at the reporting date with the risk of default at the date of initial recognition. A significant increase in credit risk leads to the transfer of the loan from stage 1 to stage 2. The Company uses both quantitative and qualitative indicators in credit risk assessment.
As indicators to assess a significant increase in credit risk, the Company uses, among other things, changes in the rating of customers. In addition to classifications, the Company uses certain qualitative indicators, such as forbearance marking, as well as a delay of at least 30 days of contractual payments. This review is automated in the calculation. Loans from stage 2 are transferred to stage 1 only after the delay period.
The Company has defined defaults in accordance with IFRS 9 (step 3) has occurred when the debtor's contract has been declared insolvent. The definition corresponds with the definition of default used by the Company in its regulatory reporting and is consistent with the definition of customer default. In assessing when a debtor is in default, the Company takes into account qualitative indicators such as breaches of loan terms and quantitative indicators such as the number of days past due date by using internal and external sources to collect information on the debtor's financial position.
The calculation of the expected credit losses is based on portfolio-specific calculation rules. The loan portfolio has been divided into the following calculation portfolios:
Calculation of the expected credit loss on each portfolio is based on the amount of the liability at the time of the Exposure at Default (EAD), the Probability of Default (PD) and the Loss Given Default (LGD). As a basis in the determination of the parameters, the Company uses the historical payment behavior of the customer and customer data as well as the liability and the collateral value. The forward-looking determination on values of the PD variables and the LGD variables makes use of macroeconomic forecasts for the future development of the Finnish economy, i.e. the change in GDP, housing price development and the number of employed.
The portfolios of private customers and the SME customers form clearly largest calculation portfolios. Private customers' portfolio includes liabilities for which the PD value has been modeled using the private customer rating method included in the IRB license application. The portfolio of SME clients includes all corporate liabilities for
which the PD value is modeled using the SME rating method. If the PD value cannot be calculated using the two methods mentioned above, the portfolio of liability is determined by the customer's sector and industry code.
The Exposure at Default (EAD) is the amount of exposure at the reporting date. Calculation of the EAD takes into account payments to the loan as stated in the payment plan. However, certain financial instruments include both a loan principal and an undrawn portion of a loan commitment. The undrawn portion of a loan is taken into account in the exposures for the total limit granted. With respect to limit receivables, EAD calculation applies the so-called CCF coefficient when taking into account undrawn limits. Loss Given Default caused by insolvency describes the share of credit losses in the loan capital at the time of insolvency.
For debt security investments, the Company determines the allowance for credit loss using the formula EAD*PD*LGD. Instrument-specific material from the market database is used as the source for calculating PDs. In addition, a low credit risk exception for debt security investments with a credit rating of at least investment grade at the reporting date is used. In these cases, the allowance for credit loss will be measured at an amount equal to the 12-month expected credit losses.
The management of the Company monitors the development of a loss allowance to ensure that the model properly reflects the amount of expected credit loss. If necessary, the management refines the calculation parameters.
Whenever a change is made to a financial asset or liability valued at amortised cost without removing the asset or liability from the balance sheet any profit or loss must be recognised. The profit or loss is calculated as the difference between the original contractual cash flows and the modified cash flows discounted at the contractual interest rate.
An example of a situation of this kind are changes made to the amortisation plan for a loan granted to the customer or granting deferred amortisation. Changes to the loan terms
resulting from a customer's weakened solvency are treated as a significant growth in credit risk. In connection with significant loan term changes, the loan is removed from the balance sheet and a new loan is recognised in its place. If the credit risk of the loan removed from the balance sheet has grown significantly, the new loan is recognised in the balance sheet as impaired.
Financial assets are removed from the balance sheet when it is expected that payment on the loans will no longer be received, and the final credit loss can be calculated. The previously recognised expected credit loss is reversed at the same time as the item is removed from the balance sheet and the final credit loss is recognised.
The loans are removed from the balance sheet when their collection proceedings have been finished or when the loan terms are changed significantly, for example in connection with refinancing. After derecognition, payments allocated to credit loss receivables are recognised through profit or loss in the item 'Expected credit loss from financial assets recognised at amortised cost'.
At the time of the initial recognition, financial liabilities are classified in one of the following items:
Financing liabilities are originally recognised in the statements at fair value. Later, financial liabilities, with the exception of liabilities recognised at fair value through profit and loss, are valued at amortised cost using the effective interest method. Transaction costs are included in the original bookkeeping value of financial liabilities valued at amortised cost. Transaction costs related to financial liabilities recognised at fair value through profit or loss are recognised as expenditure.
Financial liabilities valued at fair value through profit or loss are formed by derivative liabilities to which hedge accounting is not applied. At the reporting date, the Company does not have derivative liabilities valued at fair value through profit or loss.
Liabilities to credit institutions, liabilities to the public and general government as well as debt securities issued to the public are recognised in other financial liabilities valued at amortised cost.
Financial liabilities are not reclassified subsequent to their initial recognition.
Financial assets have not been netted in the Company's Financial Statements.
Assets and liabilities tied to items denominated in foreign currencies outside of the euro zone have been converted to euros as per the European Central Bank's average rate on the reporting date. On the income statement, foreign exchange differences that emerged during valuation have been recognised in net gains from investment operations.
Cash and cash equivalents consist of cash in hand and at banks as well as short-term deposits of less than three months.
Fair value is the price that could be received for the sale of an asset or that could be paid for assuming a debt between market parties in a common transaction occurring on the valuation date.
The fair value of a financial instrument is determined either by utilising price quotes obtained from active markets or, if active markets do not exist, utilising an established valuation method. Markets are considered to be active if price quotes are easily and regularly available and if they reflect real and regularly reoccurring market transactions between parties that are independent of each other. The current bid price is used as the quoted market price of financial assets.
If there is an established valuation method in the markets for financial instruments for which a market price cannot be directly acquired, the fair value is based on the generally used calculation model of market price and on the input quotes used by the model.
If the valuation method is not well-established in the markets, a specific generally used valuation model for the product in question is used to determine the market value. Valuation models are based on generally utilised calculation methods, and they cover all factors that parties in the markets would take into consideration when calculating prices. When determining fair value, the utilised aspects are the prices of market transactions, discounted cash flows and the fair value at the time of financial statements of another, essentially similar instrument. The valuation methods take into account credit risk assessments, used discount rates, the possibility of prepayments and other factors that impact the valuation of the financial instrument's fair value.
The fair value determination according to the IFRS 13 standard is applied to the determination of the fair value of financial instruments. The fair values of financial instruments are divided in three hierarchies according to how the fair value is determined:
Level 1: Fair values quoted in active markets for identical assets or liabilities.
Level 2: Fair values that have been determined by the use of input information other than quoted Level 1 prices that are verifiable for assets or liabilities either directly (e.g. as prices) or indirectly (e.g. derived from prices).
Level 3: Fair values that have been determined for assets or liabilities using inputs that are not essentially based on verifiable market prices.
The hierarchy levels of fair values are determined based on the lowest level of input that is significant for the investment item. The significance of an input is assessed against the item valued at fair value in its entirety. Transfers between fair value hierarchy levels are determined to have occurred on the date when the event or change in circumstances occurred.
The Company hedges the interest rate risk of changes in the value of debt certificates and fixed-rate deposit stock with interest rate derivatives and applies hedge accounting to them. In hedge accounting documentation, hedge accounting is defined as fair value hedge. The Company
follows the hedge accounting specifications and monitors the effectiveness of hedges and changes in fair values on a regular basis. In addition, at the balance sheet date, the Company has share derivatives to hedge deposits whose return is tied to a change in the value of the shares. At the time of the Financial Statements, the Company does not have derivatives that hedge the cash flow.
The change in the value of debt certificates and their impact on the fair value reserve of the Company are protected by interest rate swaps. The hedge accounting follows the provision of IFRS 9, which allows continued application of the portfolio hedge accounting in accordance with IAS 39.
Interest rate swaps are used to hedge fixed-rate deposit stocks and stock derivatives have been used to hedge deposits, whose yield is tied to changes in stock value. For hedge accounting, the hedge is subject to the IAS 39 'carve out' method. The individual terms of the ISDA/CSA collateral methods are applied to the counterparties of the interest rate swaps.
The Company follows the fair values of derivative contracts in the determination of section 2.10 Determining the fair value presented by the fair values of the financial instruments, hierarchy levels 2 and 3. Derivative contracts are valued at fair value and changes in value are recorded in the balance sheet and income statement. Positive fair values of derivative contracts are recorded in the corresponding half of the balance sheet under the item 'Derivative contracts'. The valuation of assets takes into account the counterparty's credit risk adjustment (CVA).
The negative fair values of derivative contracts are presented under 'Derivative contracts and other liabilities held for trading' in the balance sheet's liabilities. The debit valuation adjustment (DVA) is taken into account in the valuation.
Derivative contracts are valued at fair value and hedge accounting is applied to them. The changes in the fair value of hedged items and hedging instruments designated for hedging the fair value are entered in the income statement item 'Net income from hedge accounting' and in the balance sheet as an adjustment of the item in question. The interest expenses of hedge
derivatives are presented under interest expenses and the income under interest income.
Derivatives are not created for the purpose of trading. The connection between hedging derivatives and instruments to be hedged (hedge relationship) and the effectiveness of hedging are documented.
Properties and shares in property companies have been divided into properties in the Company's own use and investment properties, based on the purpose of use.
Properties have been recognised in the balance sheet at acquisition cost less planned depreciation. Shares and other equity in investment properties are recognised on the balance sheet at acquisition cost. The Company does not apply the option provided in Section 12, Article 8 of the Credit Institution Act, which allows the valuation of investment properties at fair value.
The balance sheet values of properties in the Company's own use and shares and other equity in property companies are based on the value of the assets relative to the expected income of core business operations.
The difference between the bookkeeping value of investment properties and shares and other equity in property companies, and the permanently lower likely transfer price, if it is significant, is an impairment loss recognised as an expense under 'Net income of investment properties'. Any reversals of impairment are recognised as adjustments in the same item.
The Company's key investment properties have been evaluated by property with the purchase price allocation method or the yield value method. The estimates of the yield value method are based on the amounts of net rent income from the property and the yield requirement of property markets. The fair values of investment properties are listed in Note P8.
Tax-based provisions, such as credit loss provisions, are used in the planning of the Company's Financial Statements and taxes. As such, the amounts of tax-based provisions and their changes do not depict the risks faced by the Company.
In the Company's Financial Statements, appropriations are listed without deducting the deferred tax liability.
Off-balance-sheet commitments are commitments given to a third party on behalf of a customer and irrevocable commitments given in favour of a customer.
Commitments given to a third party on behalf of a customer are, for example, guarantees and guarantee commitments equated to them. Commitments are listed at the maximum amounts of the guarantees or guarantee commitments at the end of the year.
Irrevocable commitments given in favour of a customer are, for example, binding loan commitments, granted undrawn loans as well as unused credit limits. Commitments are listed as the maximum amounts that could be payable at the end of the accounting period.
All interest income and expenses derived from interestbearing assets and liabilities are recognised in 'Interest income and expenses'. Interest is recognised on an accrual basis excluding interest for late payments, which are recognised when payments are received.
Also recognised as interest income or expense is the difference between the acquisition cost and nominal value of receivables and liabilities, which is amortised on the maturity period of the receivable or the liability. The counterpart is recognised as a change in receivable or liability.
Interest income has also been accrued on impaired receivables' remaining balance in the bookkeeping at the original effective interest rate in the contract.
Significant lending transaction and processing fee income is recognised in interest income over time using the effective interest method in accordance with the average expected maturity of the loan rather than recognising the income as a one-off gain. The clarification of the over-time accounting principles concerns new credit issued to companies and housing companies.
The model for impairment of financial assets brought by IFRS 9 requires management to make decisions, estimates and assumptions especially on the following topics:
The management team's discretion is also used in cases where the fair value of a financial instrument is determined through valuation methods. If no verifiable market inputs exist on which the used valuation methods can be based, the management team has to assess which other inputs to use to determine fair value. The principles used to determine fair value are described in more detail in the section 'Determining the fair value'.
The management decides when it considers the markets of financial instruments to be inactive. Additionally, it must be evaluated whether a single financial instrument is the object of active trading and whether the price information received from the market is a reliable indicator of the fair value of the financial instrument.
The acquisition costs of buildings and other wearable tangible and intangible assets are depreciated based on the financial holding time in equal instalments and in accordance with a previously created depreciation plan. The depreciation time is 10–40 years for buildings and 3–8 years for machinery and equipment. Depreciations are not performed for land.
Development expenses and licences of computer software are added under 'Intangible rights' and depreciated within 3–10 years. Long-term expenses are depreciated during their useful life of 3–10 years. According to a preestablished depreciation plan, goodwill is eliminated within 5 years.
The Company has not recognised income or expenses from other than ordinary activities. If the exact sum of a future loss or cost is not known, it must be entered as a statutory provision in the balance sheet.
Income taxes are recognised in the Company's financial statements based on the calculations of taxable income. Of the positive change in value included in the fair value reserve, deferred tax liabilities are recognised on the balance sheet, and of the negative change in value, deferred tax assets are recognised on the balance sheet. Additionally, of the negative change in value transferred from the fair value reserve to the result, deferred tax assets are recognised. Other deferred taxes have not been recognised at Company level.
| 31 Dec 2023 | Fair value through | Fair value through fair |
|||
|---|---|---|---|---|---|
| Financial assets (1 000 euros) | Amortised cost | profit or loss | value reserve Book value, total | Fair value | |
| Cash and cash equivalents | 682,117 | - | - | 682,117 | 682,117 |
| Receivables credit institutions | 192,305 | - | - | 192,305 | 192,305 |
| Receivables from public and public sector | 6,002,465 | - | - | 6,002,465 | 6,002,465 |
| Debt securities | - | 1,030 | 545,699 | 546,729 | 546,729 |
| Shares and other equity | - | 13,519 | - | 13,519 | 13,519 |
| Derivatives | - | 44,924 | - | 44,924 | 44,924 |
| Assets total | 6,876,887 | 59,473 | 545,699 | 7,482,059 | 7,482,059 |
| Shares, participations and subsidiaries | 26,759 | 26,759 | |||
| Investment property | 1,318 | 1,318 | |||
| Non-financial assets | 125,023 | 125,023 | |||
| Total assets | 7,635,160 | 7,635,160 |
| 31 Dec 2023 | Fair value through | Bookkeeping | ||
|---|---|---|---|---|
| Financial liabilities (1 000 euros) | Amortised cost | profit or loss | value, total | Fair value |
| Liabilities to credit institutions | 165,255 | - | 165,255 | 165,255 |
| Liabilities to public and public sector entities | 3,778,337 | - | 3,778,337 | 3,778,337 |
| Subordinated loans | 60,000 | - | 60,000 | 60,000 |
| Debt securities issued to the public | 2,930,058 | - | 2,930,058 | 2,930,058 |
| Derivatives | - | 9,455 | 9,455 | 9,455 |
| Financial liabilities total | 6,933,649 | 9,455 | 6,943,104 | 6,943,104 |
| Other than financial liabilities | 104,051 | 104,051 | ||
| Total liabilities | 7,047,155 | 7,047,155 |
| 31 Dec 2022 | Fair value | ||||
|---|---|---|---|---|---|
| Fair value through | through fair | ||||
| Financial assets (1,000 euros) | Amortised cost | profit or loss | value reserve Book value, total | Fair value | |
| Cash and cash equivalents | 402,030 | - | - | 402,030 | 402,030 |
| Loans to credit institutions | 114,655 | - | - | 114,655 | 114,655 |
| Loans to the public and public sector entities | 4,758,417 | 500 | - | 4,758,917 | 4,758,917 |
| Debt securities | - | 859 | 539,843 | 540,702 | 540,702 |
| Shares and other equity | - | 10,604 | - | 10,604 | 10,604 |
| Derivatives | - | 1,931 | - | 1,931 | 1,931 |
| Assets total | 5,275,103 | 13,893 | 539,843 | 5,828,839 | 5,828,839 |
| Shares, participations and subsidiaries | 27,010 | 27,010 | |||
| Investment property | 1,353 | 1,457 | |||
| Non-financial assets | 80,279 | 80,279 | |||
| Total assets | 5,937,481 | 5,937,585 |
| 31 Dec 2022 | Fair value through | |||
|---|---|---|---|---|
| Financial liabilities (1,000 euros) | Amortised cost | profit or loss Book value, total | Fair value | |
| Loans and receivables to credit institutions | 242,526 | - | 242,526 | 242,526 |
| Loans to the public and public sector entities | 3,112,489 | - | 3,112,489 | 3,112,489 |
| Subordinated loans | 40,000 | - | 40,000 | 40,000 |
| Debt securities issued to the public | 2,086,950 | - | 2,086,950 | 2,086,950 |
| Derivatives | - | 4,184 | 4,184 | 4,184 |
| Financial liabilities total | 5,481,966 | 4,184 | 5,486,150 | 5,486,150 |
| Other than financial liabilities | 46,328 | 46,328 | ||
| Total liabilities | 5,532,477 | 5,532,477 |
| Total | 192,305 | 114,655 |
|---|---|---|
| From domestic credit institutions | 500 | 500 |
| Minimum reserve deposit | - | 31,526 |
| Other | 500 | 32,026 |
| From domestic credit institutions | 51,142 | 7,525 |
| From the central financial institution | 140,664 | 75,104 |
| Payable on demand | 191,805 | 82,630 |
| Loans and receivables from credit institutions (1,000 euros) 31 Dec 2023 31 Dec 2022 | ||
| Loans and receivables from public and from public sector entities (1,000 euros) |
31 Dec 2023 31 Dec 2022 | |
|---|---|---|
| Companies and housing associations | 2,045,804 | 1,589,096 |
| Financial and insurance institutions | 98,621 | 64,827 |
| Public sector | 14,565 | 2,545 |
| Households | 3,779,062 | 3,052,882 |
| Non-profit organisations serving households | 30,944 | 27,510 |
| Foreign countries | 33,468 | 22,057 |
| Total | 6,002,465 | 4,758,917 |
| - of which subordinated receivables | - | 500 |
| Non-performing and forbearance receivables (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| over 90 days matured receivables | 53,206 | 40,073 |
| of which likely to be unpaid, which are undue or less than 90 days due | 89,842 | 47,497 |
| Non-performing and forbearance receivables, total | 143,048 | 87,571 |
| Forbearance receivables, total | 131,692 | 95,387 |
| Contract residual amount of financial assets that have been written off as final credit losses during the reporting period, and which are further subject to recovery measures |
2,828 | 2,266 |
| Amount of final credit losses recorded on assets for the financial year | 20,760 | 4,117 |
| 31 Dec 2023 | 31 Dec 2022 | ||||
|---|---|---|---|---|---|
| Loans and receivables and off-balance sheet (1,000 euros) | Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Expected credit losses 1.1. | 1,442 | 5,130 | 18,558 | 25,130 | 26,743 |
| Transfer to stage 1 | 181 | -1,581 | -272 | -1,672 | -980 |
| Transfer to stage 2 | -213 | 2,666 | -1,069 | 1,384 | 1,258 |
| Transfer to stage 3 | -35 | -658 | 8,174 | 7,481 | 2,644 |
| New debt securities | 731 | 1,505 | 7,770 | 10,005 | 2,118 |
| Matured debt securities | -688 | -704 | -3,812 | -5,205 | -4,891 |
| Realised credit losses | - | -23 | -11,845 | -11,869 | -2,708 |
| Recoveries on previous realised credit losses | - | - | - | - | - |
| Changes in credit risk | 210 | -38 | 2,152 | 2,324 | 8,819 |
| Changes in the ECL model parameters | - | - | - | - | - |
| Manual corrections, at credit level | 106 | 8,075 | -33 | 8,148 | -7,874 |
| Expected credit losses 31.12. | 1,733 | 14,371 | 19,624 | 35,728 | 25,130 |
| 31 Dec 2023 | 31 Dec 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| (1,000 euros) | Total | Of which central bank funding entitling debt securities |
Of which governmen t bonds |
Other debt securities |
Total | Of which central bank funding entitling debt securities |
Of which governmen t bonds |
Other debt securities |
| Recognised at fair value through | ||||||||
| profit and loss | 1,030 | - | - | - | 859 | - | - | - |
| Publicly quoted | 115 | - | - | - | 115 | - | - | - |
| Other | 915 | - | - | - | 744 | - | - | - |
| Recognised at fair value through | ||||||||
| fair value reserve | 545,699 | 512,350 | - | 512,350 | 539,843 | 502,013 | - | 502,013 |
| Publicly quoted | 545,699 | 512,350 | - | 512,350 | 539,638 | 502,013 | - | 502,013 |
| Other | - | - | - | - | 205 | - | - | - |
| Total | 546,729 | 512,350 | - | 512,350 | 540,702 | 502,013 | - | 502,013 |
| of which subordinated receivables |
- | - | - | - | 302 | - | - | - |
| 31 Dec 2023 31 Dec 2022 | |||||
|---|---|---|---|---|---|
| Debt securities, amortised | |||||
| (1,000 euros) | Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Expected credit losses 1 January | 415 | 23 | - | 438 | 1,158 |
| Transfer to stage 1 | - | - | - | - | -13 |
| Transfer to stage 2 | -6 | 29 | - | 23 | 9 |
| Transfer to stage 3 | - | - | - | - | - |
| New debt securities | 280 | 333 | - | 613 | 33 |
| Matured debt securities | -296 | -333 | - | -629 | -127 |
| Realised credit losses | - | - | - | - | - |
| Recoveries on previous realised | |||||
| credit losses | - | - | - | - | - |
| Changes in credit risk | 38 | -4 | - | 34 | -622 |
| Changes in the ECL model | |||||
| parameters | - | - | - | - | - |
| Changes based on management | |||||
| estimates | - | - | - | - | - |
| Expected credit losses 31 | |||||
| December | 430 | 48 | - | 478 | 438 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| At fair value through profit or loss | ||
| Publicly quoted | 4,214 | 2,375 |
| Other | 9,305 | 8,229 |
| At fair value through profit or loss, total | 13,519 | 10,604 |
| Of which in credit institutions | 1,523 | - |
| Of which in other companies | 11,996 | 10,604 |
| At amortised cost | ||
| Shares and holdings in participation companies | 26,759 | 27,010 |
| Of which in credit institutions | - | - |
| Of which in other companies | 26,759 | 27,010 |
| Of which in other companies | - | - |
| Total at amortised cost | 26,759 | 27,010 |
| Total shares | 40,278 | 37,613 |
| Nominal values of derivative contracts | |||
|---|---|---|---|
| (1,000 euros) | 31 Dec 2023 | |||
|---|---|---|---|---|
| Residual maturity | less than 1 year | 1-5 years | over 5 years | Total |
| Hedging derivative contracts | - | 891,000 | 627,000 | 1,518,000 |
| Fair value hedge | ||||
| Interest rate derivatives | ||||
| Interest rate swaps | - | 891,000 | 627,000 | 1,518,000 |
| Derivative contracts excluded in hedge accounting | 12,553 | - | - | 12,553 |
| Stock derivatives | 12,553 | - | - | 12,553 |
| (1,000 euros) | 31 Dec 2022 | |||
|---|---|---|---|---|
| Residual maturity | less than 1 year | 1-5 years | over 5 years | Total |
| Hedging derivative contracts | 10,000 | 291,000 | 327,000 | 628,000 |
| Fair value hedge | ||||
| Interest rate derivatives | ||||
| Interest rate swaps | 10,000 | 291,000 | 327,000 | 628,000 |
| Derivative contracts excluded in hedge accounting | 31,328 | 12,553 | - | 43,880 |
| Stock derivatives | 31,328 | 12,553 | - | 43,880 |
| Fair values of derivative contracts | ||||
|---|---|---|---|---|
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 | ||
| Assets | Liabilities | Assets | Liabilities | |
| Hedging derivative contracts | 44,924 | 9,455 | 1,926 | 4,184 |
| Fair value hedge | ||||
| Interest rate derivatives | 44,924 | 9,455 | 1,926 | 4,184 |
| Derivative contracts excluded in hedge accounting | - | - | 5 | - |
| Stock derivatives | - | - | 5 | - |
| Total | 44,924 | 9,455 | 1,931 | 4,184 |
| Fair value of hedge items on hedge accounting (1,000 | |
|---|---|
| Book value of |
|---|
| the hedge item |
| Fair value of hedge items on hedge accounting (1,000 | ||||
|---|---|---|---|---|
| euros) | 31 Dec 2023 | 31 Dec 2022 | ||
| Book value of the hedge item |
of which the change in the fair value of the hedged |
Book value of the hedge item |
of which the change in the fair value of the hedged |
|
| Fair value portfolio hedge | ||||
| Debt securities eligible for refinancing with central banks | 227,523 | 9,523 | 218,318 | 318 |
| Assets, total | 227,523 | 9,523 | 218,318 | 318 |
| Liabilities to public and public sector entities | 1,345,014 | 45,014 | 408,554 | -1,446 |
| Liabilities and equity, total | 1,345,014 | 45,014 | 408,554 | -1,446 |
| Fair value portfolio hedge | ||||
|---|---|---|---|---|
| Debt securities eligible for refinancing with central banks | 227,523 | 9,523 | 218,318 | 318 |
| Assets, total | 227,523 | 9,523 | 218,318 | 318 |
| Liabilities to public and public sector entities | 1,345,014 | 45,014 | 408,554 | -1,446 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| IT expenses | 5,487 | 5,912 |
| Goodwill | 3,527 | 500 |
| Unfinished intangible assets | 3,343 | 1,839 |
| Other intangible assets | 3,394 | 3,208 |
| Total | 15,751 | 11,459 |
| Intangible assets | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Acquisition cost January 1 | 29,212 | 26,197 |
| + increases during the accounting period | 9,075 | 3,088 |
| - decreases during the accounting period | -134 | - |
| + transfers between items | -139 | -72 |
| Acquisition cost December 31 | 38,014 | 29,212 |
| Accrued amortisation and impairment January 1 | -17,753 | -13,950 |
| +/- accrued amortisation on decreases and transfers | 72 | - |
| - amortisation during the accounting period | -4,581 | -3,804 |
| Accrued amortisation and impairment December 31 | -22,263 | -17,753 |
| Closing balance December 31 | 15,751 | 11,459 |
| Opening balance January 1 | 11,459 | 12,247 |
| 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|
| (1,000 euros) | Book value | Fair value | Book value | Fair value |
| Land and water | ||||
| In own use | 252 | 252 | 252 | 252 |
| Used for investments | 419 | 419 | 419 | 419 |
| Total | 671 | 671 | 671 | 671 |
| Buildings | ||||
| In own use | 339 | 339 | 272 | 272 |
| Used for investments | 23 | 23 | 33 | 33 |
| Total | 361 | 361 | 305 | 305 |
| Shares and other equity in property companies | ||||
| In own use | 14,513 | 14,513 | 12,959 | 12,959 |
| Used for investments | 877 | 877 | 901 | 1,004 |
| Total | 15,390 | 15,390 | 13,860 | 13,964 |
| Other tangible assets | 1,521 | 1,654 | ||
| Tangible assets, total | 17,944 | 16,490 |
Investment properties have been measured at acquisition cost.
| Changes in tangible assets during the accounting period (1,000 euros) |
Investment properties and investment property shares |
Other properties and property shares |
Other tangible assets |
Total |
|---|---|---|---|---|
| Acquisition cost January 1 | 2,035 | 15,087 | 11,877 | 28,999 |
| + increases during the accounting period | 1,000 | 718 | 272 | 1,990 |
| +/- transfers between items | -1,024 | 1,024 | 139 | 139 |
| Acquisition cost December 31 | 2,010 | 16,829 | 12,287 | 31,127 |
| Accrued depreciation and impairment January 1 | -681 | -1,604 | -10,223 | -12,508 |
| - depreciation during the accounting period | -11 | -41 | -542 | -594 |
| - impairment during the accounting period | - | -80 | - | -80 |
| Accrued depreciation and impairment December 31 | -692 | -1,725 | -10,765 | -13,183 |
| Closing Balance December 31 | 1,318 | 15,104 | 1,521 | 17,944 |
| Opening Balance January 1 | 1,353 | 13,484 | 1,654 | 16,490 |
| Changes in tangible assets during the accounting period (1,000 euros) |
Investment properties and investment property shares |
Other properties and property shares |
Other tangible assets |
Total |
|---|---|---|---|---|
| Acquisition cost January 1 | 2,380 | 17,122 | 11,412 | 30,914 |
| + increases during the accounting period | - | 76 | 393 | 469 |
| - decreases during the accounting period | -345 | -2,112 | - | -2,457 |
| +/- transfers between items | - | - | 72 | 72 |
| Acquisition cost December 31 | 2,035 | 15,087 | 11,877 | 28,999 |
| Accrued depreciation and impairment January 1 | -670 | -3,285 | -9,712 | -13,668 |
| +/- accrued depreciation on decreases and transfers | - | 1,712 | - | 1,712 |
| - depreciation during the accounting period | -11 | -30 | -511 | -552 |
| Accrued depreciation and impairment December 31 | -681 | -1,604 | -10,223 | -12,508 |
| Closing Balance December 31 | 1,353 | 13,484 | 1,654 | 16,490 |
| Opening Balance January 1 | 1,709 | 13,837 | 1,699 | 17,245 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Receivables on payment transfers | 67 | 94 |
| Other | 12,319 | 5,639 |
| Total | 12,386 | 5,734 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Interests | 52,837 | 20,885 |
| Other | 9,742 | 5,081 |
| Total | 62,579 | 25,966 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Deposits | 3,778,321 | 3,112,463 |
| Repayable on demand | 3,205,342 | 2,816,043 |
| Other | 572,979 | 296,420 |
| Other liabilitites | 16 | 27 |
| Other | 16 | 27 |
| Total | 3,778,337 | 3,112,489 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Liabilities to central banks | 30,000 | 150,000 |
| Repayable on demand | 4,420 | 4,749 |
| Other | 130,835 | 87,777 |
| Total | 165,255 | 242,526 |
| 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|
| Closing | ||||
| (1,000 euros) | balance | Nominal value | Closing balance Nominal value | |
| Certificates of deposit | 171,333 | 173,000 | 145,681 | 146,000 |
| Bonds | 2,758,725 | 2,805,000 | 1,941,269 | 1,955,000 |
| Total | 2,930,058 | 2,978,000 | 2,086,950 | 2,101,000 |
| Year of issue | ||||||
|---|---|---|---|---|---|---|
| Bond | 31.12.2023 | Interest | Due date | 31 Dec 2023 | 31 Dec 2022 | |
| OmaSp Plc 3.4.2024, covered bond | 300,000 | 0.125%/fixed | 2019 | 4/3/2024 | 299,914 | 299,579 |
| OmaSp Plc 6.4.2023, covered bond | 250,000 | 0.125 %/fixed | 2020 | 4/6/2023 | - | 249,883 |
| OmaSp Plc 17.1.2024 | 55,000 | margin 1%/variable | 2020 | 1/17/2024 | 55,000 | 54,999 |
| OmaSp Plc 25.11.2027, covered bond | 650,000 | 0.01%/fixed | 2020-2023 | 11/25/2027 | 622,126 | 403,908 |
| OmaSp Plc 19.5.2025 | 200,000 | margin 0.2 %/variable | 2021 | 5/19/2025 | 199,782 | 199,625 |
| OmaSp Plc 18.12.2026, covered bond | 600,000 | 1.5%/fixed | 2022 | 12/18/2026 | 587,613 | 583,684 |
| OmaSp Plc 26.9.2024 | 150,000 | 5%/fixed | 2022 | 9/26/2024 | 149,802 | 149,591 |
| OmaSp Plc 15.6.2028, covered bond | 350 000 | 3.125%/fixed | 2023 | 6/15/2028 | 347,641 | - |
| OmaSp Plc 15.1.2029, covered bond | 500,000 | 3.5%/fixed | 2023 | 1/15/2029 | 496,848 | - |
| 2,758,725 | 1,941,269 |
| Maturity of deposit certificates | less than 3 months |
3-6 months | 6-9 months | 9-12 months | Closing balance, total |
|---|---|---|---|---|---|
| 31 Dec 2023 | 99,464 | 62,221 | - | 9,648 | 171,333 |
| 31 Dec 2022 | 133,777 | 11,904 | - | - | 145,681 |
| Provisions | ||
|---|---|---|
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| Tax-based credit loss provisions | 212,139 | 178,854 |
| Total | 212,139 | 178,854 |
| Other liabilities | ||
|---|---|---|
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
| Liabilities on payment transfers | 17,581 | 14,646 |
| Expected credit loss on loan commitments | 269 | 297 |
| Payment liability, consortium of Savings Banks* | 19,550 | 5,200 |
| Other | 18,800 | 7,556 |
| Total | 56,200 | 27,699 |
*Payment liabilities recognised to Oma Savings Bank Plc in the acquisition of Eurajoen Savings Bank's and Liedon Savings Bank's businesses.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Interests | 34,345 | 9,697 |
| Other | 13,388 | 8,842 |
| Total | 47,733 | 18,540 |
Subordinated liabilities whose bookkeeping value exceeds 10 % of total amount of these liabilities
| (1,000 euros) | Bookkeeping value | |||
|---|---|---|---|---|
| Identifying details of liability | 31 Dec 2023 31 Dec 2022 | Interest % | Due date | |
| Oma Savings Bank Plc's debenture loan I/2022 | 20,000 | 20,000 | 3.00 | 1/15/2028 |
| Oma Savings Bank Plc's debenture loan II/2022 | 20,000 | 20,000 | 3.25 | 7/14/2028 |
| Oma Savings Bank Plc's debenture loan I/2023 | 20,000 | - | 3.25 | 10/23/2028 |
| Total | 60,000 | 40,000 |
| Amount included in own funds | ||||
|---|---|---|---|---|
| Identifying details of liability | 31 Dec 2023 31 Dec 2022 | |||
| Oma Savings Bank Plc's debenture loan I/2022 | 16,166 | 20,000 | ||
| Oma Savings Bank Plc's debenture loan II/2022 | 18,149 | 20,000 | ||
| Oma Savings Bank Plc's debenture loan I/2023 | 19,255 | - | ||
| Total | 53,571 | 40,000 |
All listed loans are denominated in euros. In the solvency calculation, the listed loans are included in the credit institution's lower tier 2 capital.
The Company retains on all loans the right to claim the loan either partially or in full before the due date. However, prepayment is only possible if permitted by the Financial Supervisory Authority, excluding minor claims that the Company will resell shortly after claiming. In the comparative period, the Company redeemed the OmaSp debenture loan I/2017 before the maturity date 1 February 2023.
Loans have been issued as a debenture loan in accordance with Article 34 of the Promissory Notes Act (622/47). These loans are subordinated to the issuer's other loans.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Tax receivables calculated from other temporary differences | 2,124 | 2,768 |
| Amount of deferred tax assets due to fair value reserve | 15,557 | 19,215 |
| Deferred tax assets total | 17,681 | 21,983 |
| Tax liabilities calculated from other temporary differences | 96 | 88 |
| Amount of deferred tax liabilities due to fair value reserve | 22 | 2 |
| Deferred tax liabilities total | 118 | 89 |
Deferred tax liabilities and receivables have been recognised in the fair value reserve for changes of certificates of receivables and equity securities entered in the fair value reserve, expected credit losses, as well as other temporary differences between accounting and taxation.
| 31 Dec 2023 | |||||
|---|---|---|---|---|---|
| Financial assets (1,000 euros) | Less than | 3 months 3 - 12 months | 1 - 5 years Over 5 years | Total | |
| Debt securities eligible for refinancing with central banks |
61,028 | 15,084 | 228,827 | 207,411 | 512,350 |
| Receivables from credit institutions | 191,805 | 500 | - | - | 192,305 |
| Receivables from public and public sector | 782,454 | 418,081 | 1,548,411 | 3,253,519 | 6,002,465 |
| Debt securities | 3,730 | 2,528 | 27,333 | 787 | 34,379 |
| Derivative contracts | - | - | 16,384 | 28,540 | 44,924 |
| Total | 1,039,017 | 436,193 | 1,820,955 | 3,490,258 | 6,786,423 |
| 31 Dec 2022 | |||||
|---|---|---|---|---|---|
| Financial assets (1,000 euros) | Less than | 3 months 3 - 12 months | 1 - 5 years Over 5 years | Total | |
| Debt securities eligible for refinancing with central banks |
7,380 | 12,348 | 228,359 | 253,927 | 502,013 |
| Receivables from credit institutions | 114,155 | 500 | - | - | 114,655 |
| Receivables from public and public sector | 268,108 | 386,030 | 1,466,879 | 2,637,900 | 4,758,917 |
| Debt securities | 1,923 | 3,054 | 25,361 | 8,352 | 38,689 |
| Derivative contracts | 15 | 36 | 144 | 1,736 | 1,931 |
| Total | 391,581 | 401,968 | 1,720,743 | 2,901,914 | 5,416,205 |
| Financial liabilities (1,000 euros) | Less than | 3 months 3 - 12 months | 1 - 5 years Over 5 years | Total | |
|---|---|---|---|---|---|
| Liabilities to credit institutions and central banks | 78,170 | - | 24,435 | 62,649 | 165,255 |
| Liabilities to public and public sector entities | 3,389,631 | 340,108 | 48,599 | - | 3,778,337 |
| Debt securities issued to the public | 154,464 | 521,584 | 1,757,162 | 496,848 | 2,930,058 |
| Subordinated debts | - | - | 60,000 | - | 60,000 |
| Derivative contracts | - | - | 1,556 | 7,899 | 9,455 |
| Total | 3,622,264 | 861,692 | 1,891,752 | 567,396 | 6,943,104 |
| 31 Dec 2022 | ||||||
|---|---|---|---|---|---|---|
| Financial liabilities (1,000 euros) | Less than | 3 months 3 - 12 months | 1 - 5 years Over 5 years | Total | ||
| Liabilities to credit institutions and central banks | 4,749 | 150,000 | 23,324 | 64,453 | 242,526 | |
| Liabilities to public and public sector entities | 2,869,480 | 197,722 | 45,288 | - | 3,112,489 | |
| Debt securities issued to the public | 133,777 | 261,787 | 1,691,386 | - | 2,086,950 | |
| Subordinated debts | - | - | - | 40,000 | 40,000 | |
| Derivative contracts | 73 | - | 2,935 | 1,175 | 4,184 | |
| Total | 3,008,080 | 609,508 | 1,762,933 | 105,629 | 5,486,150 |
Receivables from public and public sector entities, repayable on demand:
Other than fixed-term deposits and overdraft accounts are listed in the category of less than 3 months.
| 31 Dec 2023 | 31 Dec 2022 | ||||
|---|---|---|---|---|---|
| Assets (1,000 euros) | Domestic currency |
Foreign currency |
Domestic currency |
Foreign currency |
|
| Debt securities eligible for refinancing with central banks |
512,350 | - | 502,013 | - | |
| Loans and receivables to credit institutions | 192,305 | - | 114,655 | - | |
| Loans and receivables to the public and public sector entities |
6,002,465 | - | 4,758,917 | - | |
| Debt securities | 34,379 | - | 38,689 | - | |
| Derivative contracts | 44,924 | - | 1,931 | - | |
| Other assets | 846,297 | 2,439 | 519,259 | 2,018 | |
| Total | 7,632,721 | 2,439 | 5,935,464 | 2,018 |
| 31 Dec 2023 | 31 Dec 2022 | |||
|---|---|---|---|---|
| Domestic | Foreign | Domestic | Foreign | |
| Liabilities (1,000 euros) | currency | currency | currency | currency |
| Liabilities to credit institutions and central banks | 165,255 | - | 242,526 | - |
| Liabilities to public and public sector entities | 3,778,337 | - | 3,112,489 | - |
| Debt securities issued to public | 2,930,058 | - | 2,086,950 | - |
| Derivative contracts | 9,455 | - | 4,184 | - |
| Subordinated liabilities | 60,000 | - | 40,000 | - |
| Other liabilities | 56,318 | - | 27,788 | - |
| Accrued expenses and deferred income | 47,733 | - | 18,540 | - |
| Total | 7,047,155 | - | 5,532,477 | - |
The fair values of financial assets have been determined primarily on the basis of the quoted market prices. If a quoted market price was not available, the current value discounted by the market interest rate or another generally accepted valuation model or method was used in the valuation. The book value was used as the fair value for other financial assets. The book value was used as the fair value for financial liabilities.
| Financial assets | 31 Dec 2023 | 31 Dec 2022 | ||
|---|---|---|---|---|
| (1,000 euros) | Book value | Fair value | Book value | Fair value |
| Cash and cash equivalents | 682,117 | 682,117 | 402,030 | 402,030 |
| Receivables from credit institutions | 192,305 | 192,305 | 114,655 | 114,655 |
| Receivables from public and public sector entities | 6,002,465 | 6,002,465 | 4,758,917 | 4,758,917 |
| Debt securities | 546,729 | 546,729 | 540,702 | 540,702 |
| Publicly quoted | 545,814 | 545,814 | 539,753 | 539,753 |
| Other | 915 | 915 | 949 | 949 |
| Shares and other equity | 40,278 | 40,278 | 37,613 | 37,613 |
| Publicly quoted | 4,214 | 4,214 | 2,375 | 2,375 |
| Other | 36,064 | 36,064 | 35,239 | 35,239 |
| Derivative contracts | 44,924 | 44,924 | 1,931 | 1,931 |
| Total | 7,508,818 | 7,508,818 | 5,855,849 | 5,855,849 |
| Financial liabilities | 31 Dec 2023 | 31 Dec 2022 | ||
|---|---|---|---|---|
| (1,000 euros) | Book value | Fair value | Book value | Fair value |
| Liabilities to credit institutions | 165,255 | 165,255 | 242,526 | 242,526 |
| Liabilities to public and public sector entities | 3,778,337 | 3,778,337 | 3,112,489 | 3,112,489 |
| Debt securities issued to public | 2,930,058 | 2,930,058 | 2,086,950 | 2,086,950 |
| Derivative contracts | 9,455 | 9,455 | 4,184 | 4,184 |
| Subordinated liabilities | 60,000 | 60,000 | 40,000 | 40,000 |
| Total | 6,943,104 | 6,943,104 | 5,486,150 | 5,486,150 |
| 31 Dec 2023 | ||||
|---|---|---|---|---|
| Financial assets | Level 1 | Level 2 | Level 3 | Total |
| Debt securities | 546,150 | - | 579 | 546,729 |
| Shares and other equity | 4,214 | 2,439 | 6,866 | 13,519 |
| Derivative contracts | - | 44,924 | - | 44,924 |
| Total | 550,364 | 47,363 | 7,445 | 605,172 |
| Financial liabilities | Level 1 | Level 2 | Level 3 | Total |
| Derivative contracts | - | 9,455 | - | 9,455 |
| 31 Dec 2022 | ||||
| Financial assets | Level 1 | Level 2 | Level 3 | Total |
| Debt securities | 540,503 | - | 199 | 540,702 |
| Shares and other equity | 2,375 | 2,018 | 6,211 | 10,604 |
| Derivative contracts | - | 1,931 | - | 1,931 |
| Total | 542,878 | 3,948 | 6,410 | 553,236 |
| Financial liabilities | Level 1 | Level 2 | Level 3 | Total |
| Derivative contracts | - | 4,184 | - | 4,184 |
Fair value and changes in value entered directly into the income statement as well as changes, entered into the fair value reserve, from each group of financial instruments measured at fair value (1,000 euros)
| 31 Dec 2023 | |
|---|---|
| Fair value financial assets |
Fair value liabilities |
Change in value in income statement |
Change in value in fair value reserve |
|
|---|---|---|---|---|
| Financial assets at fair value through fair value reserve |
318,176 | - | -422 | -77,673 |
| Financial assets at fair value through profit or loss | 286,996 | 9,455 | -2,447 | - |
| Total | 605,172 | 9,455 | -2,868 | -77,673 |
| 31 Dec 2022 | ||||
| Fair value financial assets |
Fair value liabilities |
Change in value in income statement |
Change in value in fair value reserve |
|
| Financial assets at fair value through fair value reserve |
321,525 | - | 97 | -96,066 |
| Financial assets at fair value through profit or loss | 231,711 | 4,184 | -5,381 | - |
| Total | 553,236 | 4,184 | -5,284 | -96,066 |
| 2023 | |||||
|---|---|---|---|---|---|
| Balance sheet item | At amortised cost | Fair value through profit and loss |
Fair value through other comprehensive |
income Expected credit loss | Total |
| Cash and cash equivalents | 682,117 | - | - | - | 682,117 |
| Receivables from credit institutions | 192,305 | - | - | - | 192,305 |
| Receivables from public and public sector | 6,037,923 | - | - | -35,458 6,002,465 | |
| Debt securities* | - | 1,030 | 545,699 | - | 546,729 |
| Shares and other equity | - | 13,519 | - | - | 13,519 |
| Shares and holdings in participation | - | - | 26,759 | - | 26,759 |
| Derivative contracts | - | 44,924 | - | - | 44,924 |
| Financial assets, total | 6,912,346 | 59,473 | 572,458 | -35,458 7,508,818 | |
| Off-balance sheet items | 330,627 | - | - | -269 | 330,358 |
| Total | 7,242,973 | 59,473 | 572,458 | -35,728 7,839,176 |
* Of debt securities, which are recorded in fair value through comprehensive income items, expected credit losses of EUR -477,951.31 is recognised in fair value reserve.
| 2022 | |||||||
|---|---|---|---|---|---|---|---|
| Fair value through | |||||||
| Fair value through | other comprehensive |
||||||
| Balance sheet item | At amortised cost | profit and loss | income Expected credit loss | Total | |||
| Cash and cash equivalents | 402,030 | - | - | - | 402,030 | ||
| Receivables from credit institutions | 114,655 | - | - | - | 114,655 | ||
| Debt securities* | - | 859 | 539,843 | - | 540,702 | ||
| Shares and other equity | - | 37,613 | - | - | 37,613 | ||
| Shares and holdings in participation | - | - | 27,010 | - | 27,010 | ||
| Derivative contracts | - | 1,931 | - | - | 1,931 | ||
| Financial assets, total | 516,686 | 40,403 | 566,853 | - 1,123,942 | |||
| Off-balance sheet items | 291,191 | - | - | -297 | 290,894 | ||
| Total | 807,877 | 40,403 | 566,853 | -297 1,414,836 |
* Of debt securities, which are recorded in fair value through comprehensive income items, expected credit losses of EUR -437,592.60 is recognised in fair value reserve.
Risk rating 1: Low-risk items are considered to include the Company's internal credit rating of AAA-AA level private customers, AAA-AA + level corporate, housing companies and agricultural customers.
Risk rating 2: Reasonable risk items include the Company's internal credit rating of A-B level private customers, AA-A + level corporate and housing companies and AA-A level agricultural customers.
Risk rating 3: Increased risk items include the Company's internal credit rating of C-level private customers and A-level corporate and housing companies, as well as B-C-level agricultural customers.
Risk rating 4: The highest risk items are considered to be the Company's internal credit rating of D-level private customers, B-D-level corporate and housing companies, D-level agricultural customers and insolvent customers.
The 'No rating' item includes loans and debt securities for which the Company has not defined credit ratings or for which there are no external credit ratings available.
| 31 Dec 2023 31 Dec 2022 | |||||
|---|---|---|---|---|---|
| Loans and off-balance sheet commitments | |||||
| (1,000 euros) | Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Risk rating 1 | 2,815,108 | 33,136 | - | 2,848,243 | 2,445,011 |
| Risk rating 2 | 2,699,664 | 261,317 | 2,678 | 2,963,659 | 2,042,175 |
| Risk rating 3 | 86,830 | 288,649 | 5,626 | 381,105 | 310,627 |
| Risk rating 4 | 3,019 | 47,661 | 115,409 | 166,089 | 219,654 |
| No rating | 9,361 | 145 | 24 | 9,530 | 4,287 |
| Capital items by risk rating, total | 5,613,982 | 630,907 | 123,737 | 6,368,626 | 5,021,755 |
| Allowance for credit losses | 1,733 | 6,081 | 19,624 | 27,437 | 24,230 |
| Total | 5,612,249 | 624,827 | 104,113 | 6,341,188 | 4,997,524 |
| 31 Dec 2023 31 Dec 2022 | |||||
|---|---|---|---|---|---|
| Debt securities (1,000 euros) | Stage 1 | Stage 2 | Stage 3 | Total | Total |
| Risk rating 1 | 470,250 | - | - | 470,250 | 490,550 |
| Risk rating 2 | 400 | - | - | 400 | 400 |
| Risk rating 3 | - | - | - | - | - |
| Risk rating 4 | - | - | - | - | - |
| No rating | 119,900 | 8,050 | - | 127,250 | 125,500 |
| Capital items by risk rating, total | 589,850 | 8,050 | - | 597,900 | 616,450 |
| Allowance for credit losses | 430,182 | 48 | - | 478 | 438 |
| Total | 589,420 | 8,002 | - | 597,422 | 616,012 |
Risk rating 1: Low-risk items are considered to include the Company's internal credit rating of AAA-AA level private customers, AAA-AA + level corporate, housing company and agricultural customers.
Risk rating 2: Reasonable risk items include the Company's internal credit rating of A-B level private customers, AA-A + level corporate and housing associations and AA-A level agricultural customers.
Risk rating 3: Increased risk items include the Company's internal credit rating of C-level private customers and A-level corporate and housing companies, as well as B-C-level agricultural customers.
Risk rating 4: The highest risk items are considered to be the Company's internal credit rating of D-level private customers, B-D-level corporate and housing companies, D-level agricultural customers and insolvent customers.
The 'No rating' item includes loans and debt securities for which the Company has not defined credit ratings or for which there are no external credit ratings available.
| 31 Dec 2023 31 Dec 2022 | |||||||
|---|---|---|---|---|---|---|---|
| Loans and off-balance sheet commitments | |||||||
| by industry | Risk rating 1 Risk rating 2 Risk rating 3 Risk rating 4 | No rating | Total | Total | |||
| Companies | 1,170,961 | 726,995 | 223,868 | 63,856 | 6,406 | 2,192,087 | 1,684,014 |
| Real estate | 810,027 | 321,255 | 124,932 | 15,127 | - | 1,271,341 | 907,222 |
| Agriculture | 2,341 | 50,673 | 1,323 | 1,268 | 6,002 | 61,607 | 47,902 |
| Construction | 61,997 | 42,817 | 14,809 | 6,022 | - | 125,645 | 104,667 |
| Accommodation and food service | 25,546 | 37,440 | 17,813 | 3,956 | - | 84,755 | 72,061 |
| Wholesale and retail | 80,829 | 76,636 | 19,660 | 5,570 | - | 182,695 | 177,676 |
| Finance and insurance | 16,143 | 24,115 | 4,230 | 12 | - | 44,500 | 55,607 |
| Others | 174,078 | 174,058 | 41,101 | 31,901 | 405 | 421,542 | 318,879 |
| Public sector entities | 1,276 | 15,209 | - | - | - | 16,486 | 3,617 |
| Non-profit organisations | 15,929 | 18,812 | 91 | - | - | 34,832 | 29,383 |
| Finance and insurance | 60,460 | 42,633 | 842 | 42 | - | 103,977 | 70,808 |
| Households | 1,599,617 | 2,160,010 | 156,304 | 102,191 | 3,124 | 4,021,245 3,233,934 | |
| Total December 31 | 2,848,243 | 2,963,659 | 381,105 | 166,089 | 9,530 | 6,368,626 | 5,021,755 |
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 Description of collateral held | |
|---|---|---|---|
| Home mortgages | 3,110,044 | 2,447,825 | Mostly residential real estate collateral |
| Corporate loans | 1,914,011 | 1,482,828 Mostly property collateral | |
| Consumer credit | 360,312 | 324,335 | Mostly residential real estate collateral |
| Other | 602,614 | 495,780 Mostly property collateral | |
| Loans and receivables from public and public sector entities |
5,986,981 | 4,750,768 |
| At the | ||||
|---|---|---|---|---|
| beginning of | At the end of | |||
| the accounting | the accounting | |||
| (1,000 euros) | period | Increases | Decreases | period |
| Share capital | 20,700 | - | - | 20,700 |
| Credit loss provisions transferred to share capital | 3,300 | - | - | 3,300 |
| Other restricted reserves | -76,503 | 327,508 | -312,761 | -61,756 |
| Fair value reserve | -76,503 | 327,508 | -312,761 | -61,756 |
| Measured at fair value | -76,503 | 327,508 | -312,761 | -61,756 |
| Non-restricted reserves | 145,288 | 65,001 | - | 210,289 |
| Reserve for invested non-restricted equity | 145,288 | 65,001 | - | 210,289 |
| Retained earnings | 103,075 | 30,495 | -15,324 | 118,245 |
| Profit for the period | 30,290 | 85,088 | -30,290 | 85,088 |
| Equity, total | 226,150 | 508,091 | -358,375 | 375,866 |
| 31 Dec 2023 | ||||
|---|---|---|---|---|
| (1,000 euros) | Debt securities | Shares and other equity |
Cash flow hedge |
Total |
| Fair value reserve, 1 January 2023 | -76,503 | - | - | -76,503 |
| Increases | 47,909 | - | - | 47,909 |
| Decreases | -29,938 | - | - | -29,938 |
| Reclassified from the fair value reserve to the income statement | 422 | - | - | 422 |
| Expected credit losses | 40 | - | - | 40 |
| Changes in fair value reserve 2023, total | 18,433 | - | - | 18,433 |
| Fair value reserve December 31, 2022 (gross) | -77,195 | - | - | -77,195 |
| Deferred tax assets (+)/ liabilities (-) | 15,439 | - | - | 15,439 |
| Fair value reserve, 31 December 2023 | -61,756 | - | - | -61,756 |
(1,000 euros)
Fair value reserve, 1 January 2022 -492 - - -492
Increases 24,179 - - 24,179
Decreases -99,537 - - -99,537
Reclassified from the fair value reserve to the income statement -78 - - -78
Expected credit losses -576 - - -576
Changes in fair value reserve 2022, total -76,011 - - -76,011
| 31 Dec 2022 | ||||
|---|---|---|---|---|
| (1,000 euros) | Debt securities | Shares and other equity |
Cash flow hedge |
Total |
| Fair value reserve, 1 January 2022 | -492 | - | - | -492 |
| Increases | 24,179 | - | - | 24,179 |
| Decreases | -99,537 | - | - | -99,537 |
| Reclassified from the fair value reserve to the income statement | -78 | - | - | -78 |
| Expected credit losses | -576 | - | - | -576 |
| Changes in fair value reserve 2022, total | -76,011 | - | - | -76,011 |
| Fair value reserve December 31, 2021 (gross) | -95,629 | - | - | -95,629 |
| Deferred tax assets (+)/ liabilities (-) | 19,126 | - | - | 19,126 |
| Fair value reserve, 31 December 2022 | -76,503 | - | - | -76,503 |
| 31 Dec 2023 | 31 Dec 2022 |
|---|---|
| 118,245 | 103,075 |
| 85,088 | 30,290 |
| 210,289 | 145,288 |
| $-61,756$ | $-76,503$ |
| $-7,873$ | $-6,100$ |
| 343,992 | 196,050 |
| Fair value reserve, 31 December 2022 | -76,503 | - | - | -76,503 |
|---|---|---|---|---|
| Deferred tax assets (+)/ liabilities (-) | 19,126 | - | - | 19,126 |
| Calculation of distributable equity (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Retained earnings | 118,245 | 103,075 |
| Profit for the financial period | 85,088 | 30,290 |
| Invested unrestricted equity fund | 210,289 | 145,288 |
| Fair value reserve | -61,756 | -76,503 |
| Capitalized development expenditure | -7,873 | -6,100 |
| Total | 343,992 | 196,050 |
The fair value reserve includes the change in fair value of financial assets less deferred taxes. The value of financial assets recognised in the fair value reserve is transferred to the income statement in connection with the sale or impairment of assets.
The assets raised in the institutional and public offerings and personnel offerings in 2017–2018 are entered in the reserve for invested non-restricted equity. In addition, the reserve for invested non-restricted equity includes the assets gained from issued shares in connection with reorganisations in previous accounting periods. In the financial period 2023, a total of EUR 65 million gained from issued shares directed to Liedon Savings Bank was recognised in the reserve for invested non-restricted equity.
Retained earnings are earnings accrued over the group's companies' previous accounting periods that have not been distributed as dividends to owners.
The number of shares is 33,275,237 in total and the number of votes per share is 1 vote / share. The shares do not have a nominal value.
| 25.8 | |
|---|---|
| 9.9 | |
| 9.4 | |
| 8.8 | |
| 5.8 | |
| 5.0 | |
| 3.2 | |
| 2.4 | |
| 2.1 | |
| 2.1 | |
| 74.5 | |
| 25.5 | |
| ה ההי |
| Number of shares |
% in shares | |
|---|---|---|
| South Karelia's Savings Bank Foundation | 8,578,759 | 25.8 |
| Parkano's Savings Bank Foundation | 3,300,000 | 9.9 |
| Lieto's Savings Bank Foundation | 3,125,049 | 9.4 |
| Töysä's Savings Bank Foundation | 2,935,000 | 8.8 |
| Kuortane's Savings Bank Foundation | 1,925,000 | 5.8 |
| Hauho's Savings Bank Foundation | 1,649,980 | 5.0 |
| Renko's Savings Bank Foundation | 1,065,661 | 3.2 |
| Suodenniemi's Savings Bank Foundation | 800,000 | 2.4 |
| Elo Mutual Pension Insurance Company | 710,000 | 2.1 |
| Savolainen Heikki Antero | 691,754 | 2.1 |
| 10 largest shareholders | 24,781,203 | 74.5 |
| Other | 8,494,034 | 25.5 |
| Total | 33,275,237 | 100.0 |
| 30.1 |
|---|
| 10.9 |
| 9.9 |
| 6.4 |
| 5.5 |
| 3.5 |
| 2.7 |
| 2.6 |
| 2.3 |
| 2.3 |
| 76.1 |
| 23.9 |
| 100.0 |
| Number of | % in shares | |
|---|---|---|
| shares | ||
| South Karelia's Savings Bank Foundation | 9,078,759 | 30.1 |
| Parkano's Savings Bank Foundation | 3,290,000 | 10.9 |
| Töysä's Savings Bank Foundation | 2,970,000 | 9.9 |
| Kuortane's Savings Bank Foundation | 1,925,000 | 6.4 |
| Hauho's Savings Bank Foundation | 1,649,980 | 5.5 |
| Renko's Savings Bank Foundation | 1,065,661 | 3.5 |
| Suodenniemi's Savings Bank Foundation | 800,000 | 2.7 |
| Savolainen Heikki Antero | 786,254 | 2.6 |
| Joroinen's Oma Cooperative | 689,150 | 2.3 |
| Elo Mutual Pension Insurance Company | 686,997 | 2.3 |
| 10 largest shareholders | 22,941,801 | 76.1 |
| Other | 7,208,387 | 23.9 |
| Total | 30,150,188 | 100.0 |
The Company holds 201,386 shares on 31 December 2023.
The Company has no different share classes. All shares have equal dividend rights and other rights.
In November, the Company completed a repurchase program that had started in September, related to the acquisition of its own shares. During the period, 100,000 shares of own shares were acquired at an average price of EUR 20,5419 per share. In February, the Company's Board of Directors confirmed the fulfilment of the 2020-2021 share-based incentive scheme's earning criteria and the payment of 331,790 shares, including the amount to be paid in cash. The share rewards will be paid in four installments within three years. During the 2023 financial year, the Company disposed of a total of 57,396 shares to key persons.
In February, the Company's Board of Directors decided on a fulfilment of the 2022-2023 share-based incentive scheme's earning criteria for the year 2022 to its key persons and on the reward criteria and target levels for year 2023. The system's target group includes a maximum of 30 key personnel, including the Company's CEO and members of the Group's Management Team. The fees payable under the scheme correspond to a maximum value of 400,000 shares of Oma Savings Bank Plc, including the amount to be paid in cash.
On 30 March 2023, the Annual General Meeting authorised the Board to decide on the issue or transfer of the Company's shares, as well as on the issuance of special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Companies Act. The number of shares to be issued under the authorisation, including shares to be received on the basis of special rights, may not exceed a total of 4,000,000 shares; and to decide on the repurchase of a maximum of 1,000,000 of the Company's own shares with the Company's unrestricted equity. The authorisations are valid until the end of the next Annual General Meeting, however, not later than 30 June 2024.
On 22 September 2022, the Board of Directors decided to carry out a paid directed share issue. All new shares of Oma Savings Bank Plc issued in the share issue, 3,125,049, were issued to Liedon Savings Bank as consideration for the business to be transferred when the implementation of the transfer of Liedon Savings Bank's business under the acquisition plan was registered in the Trade Register on 28 February 2023.
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Interest income | ||
| Debt securities eligible for refinancing with central banks | 4,431 | 2,570 |
| Receivables to credit institutions | 11,627 | 1,377 |
| Receivables to public and public sector entities | 266,671 | 108,463 |
| On debt securities | 671 | 535 |
| Derivate contracts | 37,613 | 6,910 |
| Negative interest expenses from financial liabilities | 801 | 1,077 |
| Other interest income | 905 | 568 |
| Total | 322,718 | 121,500 |
| Interest income on financial assets recorded in stage 3 | 5,585 | 2,305 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
| Interest expenses | ||
| Liabilities to credit institutions | -4,882 | -544 |
| Liabilities to the public and public sector entities | -21,964 | -1,280 |
| Debt securities issued to public | -54,488 | -10,907 |
| Derivative contracts and liabilities held for trading purposes | -40,775 | -2,742 |
| Subordinated liabilities | -1,754 | -354 |
| Negative interest income from financial assets | -469 | -983 |
| Other interest expenses | -904 | -2 |
| Total | -125,236 | -16,812 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Dividend income from financial assets at fair value through profit and loss |
217 | 646 |
| Total | 217 | 646 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Fee and commission income | ||
| Lending | 12,575 | 13,019 |
| Borrowing | 107 | 77 |
| Payment transactions | 31,294 | 22,837 |
| Asset management | 852 | 898 |
| Brokered products | 8,986 | 6,444 |
| Granting of guarantees | 2,094 | 1,865 |
| Other fee and commission income | 714 | 554 |
| Total | 56,621 | 45,694 |
| Fee and commission expenses | ||
| Paid delivery fees | -1,966 | -1,464 |
| Other | -7,234 | -5,251 |
| Other | -7,234 | -5,251 |
|---|---|---|
| Total | -9,200 | -6,715 |
| 1-12/2023 | 1-12/2022 | |||||
|---|---|---|---|---|---|---|
| (1,000 euros) | Capital gain and loss (net) |
Fair value change (net) |
Total | Capital gain and loss (net) |
Fair value change (net) |
Total |
| On debt securities | - | 25 | 25 | - | -136 | -136 |
| Shares and other equity | - | -2,944 | -2,944 | -203 | -4,828 | -5,031 |
| Derivative instruments and other receivables |
- | -306 | -306 | - | -4 | -4 |
| Net gains on trading in foreign currencies |
-83 | - | -83 | 130 | - | 130 |
| Total | -82 | -3,226 | -3,308 | -73 | -4,968 | -5,041 |
| Changes in fair value of hedge instruments (net) |
- | 38,071 | 38,071 | - | -3,850 | -3,850 |
| Changes in fair value of hedged items (net) |
- | -37,292 | -37,292 | - | 3,436 | 3,436 |
| Net income from hedge accounting | - | 779 | 779 | - | -414 | -414 |
| Net income total | -82 | -2,447 | -2,529 | -73 | -5,381 | -5,454 |
| 1-12/2023 | 1-12/2022 | |||||
|---|---|---|---|---|---|---|
| (1,000 euros) | Capital gain and loss (net) |
Transfers from the fair value reserve |
Total | Capital gain and loss (net) |
Transfers from the fair value reserve |
Total |
| On debt securities | 610 | -422 | 188 | -500 | 97 | -403 |
| Total | 610 | -422 | 188 | -500 | 97 | -403 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Rent income | 235 | 196 |
| Rent expenses | - | -1 |
| Depreciation | -11 | -14 |
| Capital gain and loss (net) | - | -3 |
| Other income | 5 | - |
| Other expenses | -137 | -101 |
| Total | 93 | 78 |
| 1-12/2023 | 1-12/2022 |
|---|---|
| 235 | 196 |
| -1 | |
| $-11$ | $-14$ |
| -3 | |
| 5 | |
| $-137$ | $-101$ |
| 93 | 78 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Other operating income | ||
| Rent income from properties in own use | 81 | 95 |
| Gains on own-occupied real estate assets | 11 | 9 |
| Other income | 3,933 | 4,160 |
| Total | 4,026 | 4,264 |
| Other operating expenses | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Rent expenses | -4,040 | -2,757 |
| Expenses on properties in own use | -1,866 | -1,546 |
| Guarantee Fund expenses | -2,743 | -2,266 |
| Other expenses | -7,810 | -8,790 |
| Total | -16,458 | -15,359 |
Expenses arising from the acquisition of Liedon Savings Bank's business were recorded EUR 2.5 million and from acquiring business arrangements of Handelsbanken, EUR 0.8 million for the last two quarters.
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| KPMG Oy Ab | ||
| Auditor's fees by assignment group: | ||
| Audit | 311 | 303 |
| Assignments as provided for in Section 1, Sub-section 1, Clause 2 of the Auditing Act |
- | 11 |
| Acquisition-related expenses | 10 | 24 |
| Tax advisory | 4 | 2 |
| Other services | 33 | 81 |
| Total | 358 | 421 |
| The Financial Stability Authority has confirmed payments: | ||
| Deposit Guarantee Fund's payment | -2,743 | -2,266 |
| from which paid amount from the old Deposit Guarantee Fund | ||
| (VTS Fund) | -2,743 | -2,266 |
| The Company's estimate of how many years funds can be transferred | ||
| from VTS Fund concerning Oma Savings Bank Plc. | 2 | 3 |
| Resolution Fund contribution | -2,227 | -1,968 |
| Total | -28,659 | -24,204 |
|---|---|---|
| Other long-term benefits | -843 | -617 |
| Pensions | -4,087 | -3,386 |
| Long-term benefits | -4,930 | -4,004 |
| Salaries and rewards | -23,729 | -20,200 |
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
| Number of employees | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Permanent full-time employees | 389 | 294 |
| Permanent part-time employees | 6 | 1 |
| Temporary employees | 69 | 62 |
| Total | 464 | 357 |
| Average number of employees during the financial year. | 419 | 347 |
| Total | 464 | 357 |
|---|---|---|
| Temporary employees | 69 | 62 |
| Permanent part-time employees | 6 | 1 |
| Permanent full-time employees | 389 | 294 |
The pension cover of the personnel has been arranged through the pension insurance company Elo and there is no uncovered pension liability.
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Other personnel expenses | -2,827 | -1,795 |
| Office expenses | -8,913 | -2,817 |
| IT expenses | -22,216 | -19,999 |
| Telephony expenses | -1,682 | -1,401 |
| Marketing expenses | -3,410 | -2,137 |
| Other administrative expenses | -790 | -175 |
| Total | -39,838 | -28,324 |
P35 Depreciation, amortisation and impairment on tangible and intangible assets
| (1,000 euros) | 1-12/2023 | 1-12/2022 |
|---|---|---|
| Depreciation and amortisation | -5,227 | -4,339 |
| Tangible assets | -584 | -538 |
| Intangible assets | -4,644 | -3,801 |
| Total | -5,227 | -4,339 |
| Depreciation and amortisation | -5,227 | -4,339 |
|---|---|---|
| Tangible assets | -584 | -538 |
| Intangible assets | -4,644 | -3,801 |
| Total | -5,227 | -4,339 |
| 1-12/2023 | 1-12/2022 |
|---|---|
| $-23,729$ | $-20,200$ |
| $-4,930$ | -4,004 |
| $-4,087$ | -3.386 |
| -843 | -617 |
| $-28,659$ | $-24,204$ |
Minimum rent payable based on irrevocable rent agreements.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Within one year | 3,345 | 2,673 |
| Within more than one year and no more than five years | 7,840 | 5,740 |
| Within more than 5 years | 779 | 211 |
| Total | 11,964 | 8,624 |
The rental liabilities of the branches and equipment transferred as a result of the acquisition of Liedon Savings Bank's business
increased the amount of rental liabilities during the financial year.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Commitments given to a third party on behalf of a customer | ||
| Guarantees | 41,926 | 34,774 |
| Irrevocable commitments given in favour of a customer | 330,627 | 291,191 |
| Off-balance sheet commitments, total | 372,553 | 325,965 |
The Company belongs to Oy Samlink Ab's value added tax obligation group.
| (1,000 euros) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| The joint liability amount related to the group registration of value added tax | 1,232 | 231 |
| (1,000 euros) | 1-12/2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Expected credit loss on financial assets at amortised cost and guarantees and other off-balance sheet commitments |
Expected credit losses, gross |
Reversals | Reversals of final credit losses recognised in the income statement |
Final credit losses and impairment losses recognised in the income stetement |
Total expected and final credit losses |
||||
| Receivables to credit institutions | -552 | - | - | - | -552 | ||||
| Receivables to the public and public sector entities | -9,544 | 11,869 | 1,748 | -20,760 | -16,687 | ||||
| Debt securities | -40 | - | - | - | -40 | ||||
| Off-balance sheet commitments | 153 | - | - | - | 153 | ||||
| Total | -9,984 | 11,869 | 1,748 | -20,760 | -17,126 |
| (1,000 euros) | 1-12/2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Expected credit loss on financial assets at amortised cost and guarantees and other off-balance sheet commitments |
Contractual expected credit losses, gross |
Reversals | Reversals of final credit losses recognised in the income statement |
Final credit losses recognised in the income stetement |
Total expected and final credit losses |
|||
| Receivables to credit institutions | 117 | - | - | - | 117 | |||
| Receivables to the public and public sector entities | -1,841 | 2,708 | 462 | -4,117 | -2,787 | |||
| Debt securities | 720 | - | - | - | 720 | |||
| Off-balance sheet commitments | 629 | - | - | - | 629 | |||
| Total | -375 | 2,708 | 462 | -4,117 | -1,321 |
Oma Savings Bank Plc's related party information is presented in Note G31 Management's salaries and related party events. The parent Company's related party essentially corresponds to the Group's related party.
related services, except for providing and maintaining securities accounts at the top tier level pursuant to the EU's regulation on
| 300 | Annual Report 2023 | Contents | OmaSp in Brief | Sustainability | Corporate Governance | Report of Board of Directors | Financial Statements | 301 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated financial statements | Group's notes | Parent company's financial statements | Parent company's notes | Signatures | Audit report | |||||
| Signatures on the Financial Statements and the Annual Report |
||||||||||
| In Helsinki, 29 February 2024 OMA SAVINGS BANK PLC'S BOARD OF DIRECTORS |
||||||||||
| Jarmo Salmi Chairman of the Board |
Jyrki Mäkynen | Vice Chairman of the Board | ||||||||
| Aila Hemminki | Aki Jaskari | Timo Kokkala | ||||||||
| Jaakko Ossa | Jaana Sandström | Pasi Sydänlammi CEO |
Financial Statements 2023 | |||||||
| Auditor's Note | ||||||||||
| An audit report has been provided today. In Helsinki, 29 February 2024 KPMG Oy Ab |
||||||||||
APA Tuomas Ilveskoski
The document is an English translation of the Finnish auditor's report. Only the Finnish version of the report is legally binding
To the Annual General Meeting of Oma Savings Bank Plc
Report on the Audit of the Financial Statements
We have audited the financial statements of Oma Savings Bank Plc (business identity code 2231936-2) for the year ended 31 December, 2023. The financial statements comprise the consolidated balance sheet, income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and notes, including a material accounting policy information, as well as the parent company's balance sheet, income statement, statement of cash flows and notes.
Our opinion is consistent with the additional report submitted to the Board of Directors.
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group companies are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have provided have been disclosed in note K22 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The scope of our audit was influenced by our application of materiality. The materiality is determined based on our professional judgement and is used to determine the nature, timing and extent of our audit procedures and to evaluate the effect of identified misstatements on the financial statements as a whole. The level of materiality we set is based on our assessment of the magnitude of misstatements that, individually or in aggregate, could reasonably be expected to have influence on the economic decisions of the users of the financial statements. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for qualitative reasons for the users of the financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
The Key Audit Matter How the matter was addressed on the audit
Loans and receivables from customers - valuation (Note G1 Accounting principles for the consolidated financial statements and notes G2, G5 and G24 to the consolidated financial statements)
Due to the significance of the carrying amount involved, complexity of the accounting methods used for measurement purposes and management valuation judgements, valuation of loans and receivables to customers are addressed as a key audit matter.
We evaluated compliance with the lending instructions and assessed the appropriateness of the recognition and measurement principles, as well as tested controls over valuation of loan receivables and collaterals.
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company's and the group's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of the Board of Directors' and the Managing Director's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company's or the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.
within the group to express an opinion on the consolidated financial statements. We are responsible for the direction,
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
We were first appointed as auditors by the Annual General Meeting on April 9, 2016, and our appointment represents a total period of uninterrupted engagement of eight years.
The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report, but does not include the financial statements or our auditor's report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor's report, and the Annual Report is expected to be made available to us after that date. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
| 304 | Annual Report 2023 | Contents | OmaSp in Brief | Sustainability | Corporate Governance | Report of Board of Directors | Financial Statements | 305 | |
|---|---|---|---|---|---|---|---|---|---|
| Consolidated financial statements | Group's notes | Parent company's financial statements | Parent company's notes | Signatures | Audit report |
In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Helsinki, 29 February 2024
KPMG OY AB
TUOMAS ILVESKOSKI Authorised Public Accountant, KHT
| 306 | Annual Report 2023 | Contents | OmaSp in Brief | Sustainability | Corporate Governance | Report of Board of Directors | Financial Statements | 307 | |
|---|---|---|---|---|---|---|---|---|---|
| Consolidated financial statements | Group's notes | Parent company's financial statements | Parent company's notes | Signatures | Audit report |
Oma Säästöpankki Oyj tel. +358 20 764 0600, [email protected]
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