PRESS RELEASE ON 30 JANUARY 2009
- Tapiola Bank’s annual result was positive for the first time. The bank's profit during 1 January 2008-31 December 2008 totalled EUR 1.6 million (loss of EUR 2.1 million in 2007).
- Number of bank customers increased to 159,000 in 2008 (115,000 customers 12/2007).
- According to unaudited financial statements, Tapiola Bank’s credit portfolio increased to EUR 973 million (EUR 680 million) and its deposit base to EUR 1,190 million (EUR 840 million).
- The customer bonuses amounted to EUR 9.7 million. The bonuses were distributed as total customership benefits and higher interest rates than those on the market.
- Despite the challenges during 2008, the number of unit holders in Tapiola Asset Management increased by 17 percent to 34,101 unit holders (29,109).
- The company’s market share in mutual fund business grew to 2.5 percent (2.2%). Tapiola Asset Management is now the seventh largest fund management company in Finland.
- The assets managed by the Bank Group totalled EUR 6,089 million (EUR 6,490 million) at the end of the financial period.
Tapiola Bank Ltd.
Tapiola Bank’s result during 1 January 2008-31 December 2008 showed a profit of EUR 1.6 million (loss of EUR 2.1 million in 2007). The bank became profitable sooner than expected. Tapiola Bank launched operations in February 2004, and the bank was initially expected to be profitable in 2009.
The increasing number of customers and the fast positive development of credits and deposits is also evidence of Tapiola Bank’s rapid growth. The number of bank customers increased to 159,000 in 2008 (115,000 customers). According to unaudited financial statements, Tapiola Bank’s credit portfolio increased to EUR 973 million (EUR 680 million) and its deposit base to EUR 1,190 million (EUR 840 million).
The bank’s net interest income in 2008 was EUR 12 million (EUR 8.1 million). The bank’s solvency ratio at the end of the financial year was 18.7 percent (17.3%).
Operational Review by Managing Director
The number of customers grew by 44,000 to 159,000 in 2008. Approximately 4 percent of the Finns change their bank annually, but last year this figure was exceeded. According to Managing Director Harri Lauslahti, there were several reasons for this.
– I would describe year 2008 as a year of turbulence for the Finnish banks. For example one of our competitors had major difficulties when implement their new banking system and as a consequence many of their customers decided to change bank. In addition, the collapse of the Icelandic banks resulted in mistrust among the depositors.
I am extremely satisfied that Tapiola Bank managed to attract such a large number of those who decided to change bank. Especially in difficult times, customers appreciate a Finnish bank that can be trusted, Lauslahti says. According to Lauslahti, also the new bonus program attracted people.
The increasing number of customers also made it possible to increase credits and deposits faster than planned. According to unaudited financial statements, the credit portfolio increased to EUR 973 million (EUR 680 million) and the deposit base to EUR 1,190 million (EUR 840 million). These figures are evidence of sound business fundaments. The company can finance the lending with customer deposits. As a consequence, the mistrust in the banking industry has not affected the result because Tapiola Bank is not dependent on external ledning. Furthermore the increase of customers, deposits and credits boosted the net interest income. It increased by 48 percent to EUR 12 million.
Tapiola Bank changed the prime rate three times during the year. These changes were also applied on current and savings account interest rates.
– Tapiola Bank pays interest on daily balances of current and savings accounts, not on the month’s lowest balance. In our opinion this is fair. Since the customers own Tapiola, this can also be seen as a customer benefit. The customer bonuses distributed by Tapiola Bank amounted to EUR 9.7 million. The bonuses were distributed as total customership benefits and higher interest rates than those on the market.
Tapiola Bank is known as a bank for private customers but it has now started to offer bank services to corporate customers. The bank offers companies overdraft facility, guarantee and payments traffic basic services. In addition, the bank also offers financing to selected companies.
According to a survey, almost 90 percent of the customers are willing to recommend Tapiola Bank. The survey also measured customer satisfaction and up to 70 percent of the customers give Tapiola Bank top marks.
Tapiola Asset Management Ltd.
Despite the global financial crisis impact on the mutual fund business, Tapiola Asset Management Ltd. was successful. The company managed to increase the number of fund unit holders by 17 percent and also improved its market share. The company’s market share in mutual fund business grew to 2.5 percent (2.2%).
The mutual fund capital managed by Tapiola Asset Management decreased by approximately 28.5 percent to EUR 1,026 million (EUR 1,436 million) during the review period. This is a significantly smaller decrease than the fund capital decrease of the industry. The corresponding decrease of the industry was 37 percent, and according to the Finnish Association of Mutual Funds the total fund capital in Finnish mutual funds decreased from EUR 66 billion at the beginning of 2007 to EUR 41.3 billion at the end of December 2008.
Contrary to the industry in general, the number of unit holders in Tapiola Asset Management increased by 17 percent to 34,101 (29,109) unit holders. The unit holder decrease of the industry was 8 percent since the total number of unit holders in the Finnish Association of Mutual Funds member companies dropped from 2.5 million to 2.3 million in 12 months.
The company’s business result showed a loss of EUR 233,794 (EUR 0.459 million). The assets managed by Tapiola Asset Management amounted to EUR 4,880 million (EUR 5,630 million).
Review by Managing Director
The Managing Director of Tapiola Asset Management Ltd., Tom Liljeström, is satisfied with the development of the company.
– Due to the unstable markets the customers have increasingly turned to asset management professionals when planning their investment decisions. I am especially pleased with the growth of market share. On the basis of market share we are now the seventh largest mutual fund company in Finland. Our aim is to be among the five largest within four years, Liljeström says.
December was a historical month for Tapiola’s mutual fund business due to the fact that Tapiola Asset Management for the first time in its history clinched first place in mutual fund net subscriptions. In December the customer assets of Tapiola grew by EUR 42.5 million when the decrease of the industry was EUR 486.5 million.
Asset Management launched two new mutual funds in 2008. In April the moderate short-term bond fund Tapiola Cash was introduced on the market. In October Tapiola Asset Management went against the mainstream and launched an equity fund investing in Eastern Europe.
The financial figures of this press release are preliminary. The results 2008 (unaudited) of companies included in the Tapiola Group are presented for the media on 16 February 2009 at 9.30 am.
Tapiola Bank Ltd.
(09) 453 7100
Tapiola Asset Management Ltd.
(09) 453 2102
Tiina Niemi/Corporate Communications