Inside information, negative profit warning

Oma Savings Bank Plc publishes preliminary information on the result for the first quarter

OMA SAVINGS BANK PLC STOCK EXCHANGE RELEASE, 16 APRIL 2024 AT 8:45 A.M EET, INSIDE INFORMATION

Inside information, negative profit warning: Oma Savings Bank Plc publishes preliminary information on the result for the first quarter

Oma Savings Bank Plc (OmaSp or the Company) publishes preliminary information on the preliminary result for the first quarter of 2024 due to an additional allowance based on management's judgement to be recognised for the period. The Company updates its guidance and comparable profit before taxes is expected to be EUR 120–140 million for the financial year 2024.

OmaSp's business development has continued to exceed expectations during the first quarter despite the challenging economic operating environment. Both main sources of income, net interest income and fee and commission income and expenses, have continued strong growth. At the end of the first quarter, the Company detected non-compliance with the guidelines as a result of its own monitoring processes, as a result of which the Company's credit risk position deteriorated materially for certain customer entities. The reason behind the event is a violation of the guidelines related to the Company's lending, as a result of which individual customer entities were deliberately formed incorrectly. Upon discovering what had happened, the Company immediately launched an extensive investigation.

The weakening of the collateral position due to non-compliance combined with the prevailing general weak economic situation increases the Company's credit risk from previously reported. Due to the change in risk position, an additional allowance based on management’s judgement of EUR 19.5 million will be recognised in the first quarter. According to the Company's estimate, the additional allowance covers possible credit losses realised in the future due to changes in the credit risk position.

Based on unaudited and preliminary data, OmaSp's first quarter net interest income will increase by 58% and fee and commission income and expenses by 22% compared to the comparison period. Impairment losses on financial assets total EUR 23.1 million, including the additional allowance based on management’s judgement of EUR 19.5 million. OmaSp's comparable profit before taxes is approximately EUR 25.6 million for the first quarter, an increase of 6% compared to the comparison period. Comparable profit before taxes excluding additional allowance based on management’s judgement is approximately EUR 45.1 million. The comparable cost/income ratio remains at an excellent level of approximately 34%.