Banking groups operating in Finland reported better first-half performance in 2011 than twelve months earlier. Despite the improvement, profitability numbers stayed clearly below the pre-crisis level. The active demand for credit continued, and banks’ net interest income grew. The number of reported credit losses was also notably smaller in the first half of 2011 than at the same time last year.

The low interest rate level favoured borrowers and maintained demand especially for housing loans. At the end of June, the amount of housing loans held by households was nearly 7% higher than at the same time last year.
 
Net interest income grew, as short-term market interest rates rose during the first half-year. The uptrend in market interest rates caused a slight increase in the difference between loan and deposit rates. Loans were tied to short-term reference rates more frequently than deposits. On average, the difference between rates was 0.3 percentage points higher than twelve months earlier.

Despite the fluctuating investment market, funds and insurance savings grew. The volume of capital managed by investment funds was nearly 8% larger, and the volume of life insurance savings 6% larger than a year ago. Deposits grew by more than 7%, which was mostly due to the popularity of households’ fixed-term deposits.

Credit and impairment losses were reported for €150 million by the end of June. This is half of what was reported last year. The total volume of non-performing loans was €1.4bn, which is only 0.6% of the loan portfolio and issued bank guarantees.

Banking groups’ performance statistics

Further information:
Tarja Kallonen, Head of Financial Research
tel. +358 20 793 4261