Oma Savings Bank Plc’s Interim Report January-September 2025: Moderate result in challenging operating environment – solvency strengthened further

Core Insights - Oma Savings Bank Plc reported moderate results for Q3 2025 amid a challenging operating environment, with a focus on strengthening solvency [1][2][14] Financial Performance - The comparable profit before taxes for Q3 was EUR 16.1 million, down from EUR 27.6 million in the previous year, reflecting a decline in net interest income and increased operating expenses [4][16] - Net interest income decreased by 23.2% in Q3, totaling EUR 40.2 million, primarily due to a smaller loan portfolio and reduced market interest rates [6][17] - Total operating income for Q3 decreased by 17.2%, while total operating expenses increased by 19.3% year-on-year [17] - The cost/income ratio for Q3 was 51.1%, compared to 43.4% in the previous year, indicating increased operational costs [17] Loan and Deposit Portfolio - The mortgage loan portfolio decreased by 3.7%, and the corporate loan portfolio decreased by 17.9% year-on-year, attributed to divestments and a controlled winding down of high-risk customers [7][17] - The deposit portfolio saw a slight decrease of 0.7% over the past year, with fluctuations in corporate customer deposits impacting the overall balance [17] Risk Management and Compliance - The company is actively working on risk management and internal operating model development, with costs related to compliance initiatives recorded at EUR 1.7 million for Q3 [3][17] - Impairment losses on financial assets decreased by 23.8% in Q3, totaling EUR -10.1 million, although challenges remain in the SME sector due to economic conditions [7][17] Customer Satisfaction and Service Expansion - Oma Savings Bank maintains a strong customer-centric approach, ranking third in private customer satisfaction according to the latest EPSI Rating bank survey [9][10] - The bank expanded several branches to enhance accessibility and meet customer demand, reinforcing its commitment to personal banking services [8] Capital Position - The total capital ratio strengthened to 19.2% at the end of September, up from 15.6% the previous year, indicating a solid financial position [14][16] - The Common Equity Tier 1 (CET1) capital ratio reached 18.2%, exceeding the regulatory minimum by 8.9 percentage points [14] Outlook - The company has lowered its earnings guidance for 2025, anticipating continued high costs due to investments in risk management and quality processes [17][20] - The expected comparable profit before taxes for 2025 is projected to be between EUR 50-65 million, down from EUR 86.7 million in 2024 [20]