PRESS RELEASE
28 January 2010
Advance Information on the 2009 Financial Statements
- Tapiola Bank’s profit during 1 January 2009–31 December 2009 totalled EUR 1.7 million (EUR 1.6 million in 2008).
- The number of the bank’s customers increased by 25,000 to 184,400 customers (159,400 in 2008).
- The credit portfolio grew by EUR 183 million to EUR 1,156 million (EUR 973 million) and its fund-raising from customers by EUR 82 million to EUR 1,272 million (EUR 1,190 million).
- Tapiola Bank’s customer bonuses amounted to EUR 9.9 million. The bonuses were distributed as loyalty benefits and better interest rates than those on the market.
- The number of unit holders in funds managed by Tapiola Asset Management increased by nearly 11,000 to 44,834 (34,101) unit holders.
- The market share in fund operations grew to 2.9 per cent (2.5%).
- The customer funds managed by the Tapiola Bank Group totalled EUR 6,987 million (EUR 6,089 million) at the end of the financial year.
Tapiola Bank Ltd.
Tapiola Bank Ltd’s profit during 1 January 2009–31 December 2009 totalled EUR 1.7 million (EUR 1.6 million in 2008). Despite the uncertain situation, the result for the financial year is clearly better than anticipated. The number of Tapiola Bank’s customers increased by 25,000 to 184,400 customers (159,400). The credit portfolio grew by EUR 183 million to EUR 1,156 million (EUR 973 million) and fund-raising from asset management customers by EUR 82 million to EUR 1,272 million (EUR 1,190 million). Demand for housing loans was high, and the credit portfolio grew more rapidly than the sector’s average growth.
In 2009, the bank’s interest margin was EUR 13 million (EUR 12 million) and solvency ratio remained strong, being 16.3% (18.7%) at the end of the financial period.
Review by the Managing Director of Tapiola Bank
Despite the uncertain market situation, 2009 was a year of steady growth for Tapiola Bank. The number of customers increased by 25,000.
The bank’s market share during the financial year was 2 per cent of primary bank customers and 2 per cent of secondary bank customers. Hence, Tapiola Bank’s market share totalled 4 per cent.
“Tapiola Bank’s biggest challenge was to ensure that we can successfully manage our balance sheet risks. The previous year’s high interest rates affecting our deposit base and credit portfolio and the associated commitments fell due at different times. With hard work, we managed to keep our result profitable, although the interest margin weakened and turnover declined significantly,” says Harri Lauslahti, Tapiola Bank’s Managing Director.
“We were careful not to take unnecessary risks and took such measures that our balance sheet growth was more moderate than in the preceding years,” says Mr Lauslahti.
Tapiola Bank lowered its prime rate five times during the year. Despite the general decline in interest rates, the bank raised the interest rate on customers’ current accounts from 0.3 per cent to 0.5 per cent in May. At the same time, the savings account’s interest terms were improved. “We have ourselves spoken for interest on current accounts, so we wanted to reward ordinary account customers, even though interest rates were declining,” says Mr Lauslahti.
The differences in current account interest rates and the calculation method of the interest have a significant impact on the sums a bank pays its customers. “Tapiola Bank pays interest on daily balances of current and savings accounts, not on the month’s lowest balance as banks usually do. In our opinion, Tapiola’s way of operating is fair.” Tapiola Bank’s customer bonuses during the financial year came to EUR 9.9 million. The bonuses were distributed as loyalty benefits and better interest rates than those on the market.
During 2009, the bank launched new services for entrepreneurs and farmers. The bank offers account, payment, money management and payment terminal services to entrepreneurs employing 1–4 people and to farmers. In addition, financing is offered to selected entrepreneurs and farmers.
The bank’s customers gave an excellent rating to Tapiola Bank's benefits, credit granting, functionality of the online bank, and for the professional way of handling financial matters. According to a survey, over 90 per cent of the bank’s customers said that they would be willing to recommend Tapiola Bank to others.
Tapiola Asset Management Ltd.
The fund capital in the mutual funds managed by Tapiola Asset Management Company increased from EUR 1,026 million to EUR 1,594 million in 2009. The company’s result from operations was EUR 0.5 million (EUR -0.2 million). The company’s market share of the mutual funds registered in Finland increased to 2.9 per cent at the turn of the year (2.5%) and, measured by fund capital, the company was the ninth largest (8th largest) fund management company in Finland.
Tapiola’s funds gained nearly eleven thousand new unit holders during the year, increasing the number of unit holders to nearly forty-five thousand in 26 different funds.
Review by the Managing Director of Tapiola Asset Management
The investments from corporate and community customers grew significantly in 2009. “We gained new customers from various kinds of institutional investors. Also existing institutional customers increased their assets managed at Tapiola Asset Management. Investments were made fairly evenly in fixed-income, equity and balanced funds, as well as in discretionary asset management,” says Tom Liljeström, Managing Director of Tapiola Asset Management.
The good investment year was also reflected in the positive development of the return on customer portfolios and mutual funds under the management of Tapiola Asset Management Ltd. “The performance of the mutual funds as regards investments was outstanding, both in absolute terms and relative to risks. Tapiola’s funds have been successful in comparisons conducted by impartial fund rating companies. According to an analysis carried out by Eufex Ltd, at the end of 2009 the profit of Tapiola Asset Management’s funds relative to risks was the highest out of all Finnish fund management companies (source: www.eufex.fi 5 Jan 2010). Thanks to correct market allocation emphasis, significant additional return could also be achieved in power of attorney portfolios, which was reflected as high customer satisfaction,” says Mr Liljeström.
Both Private and Shield asset management concepts were launched as new asset management services. Both new asset management models became very popular and growth expectations were achieved in accordance with targets.
In May, Tapiola Asset Management launched a new balanced fund, Tapiola Shield. Already in its first year of operating, the fund collected a capital of nearly EUR 17 million and 562 unit holders.
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The financial figures in this press release are preliminary. Preliminary financial statement data of Tapiola Group companies for 2009 will be presented to the media on Tuesday 16 February 2010 at 9:00 am. Audited financial results of the companies will be published in the week of 22 March.
Further information
Tapiola Bank
Managing Director
Harri Lauslahti
Tel. +358 9 453 7100
Tapiola Asset Management
Managing Director
Tom Liljeström
Tel. +358 9 453 2102