In the first quarter of 2019, the net income from financial operations of credit institutions engaged in banking in Finland amounted to 1,069 million euros and their operating profit to 1,289 million euros, according to Statistics Finland’s financial statement statistics on credit institutions.
Compared to the same quarter one year ago, the operating profit grew particularly due to increased interest and commission income.
However, Statistics Finland does not provide any figures on operating profit compared to previous periods. Due to a significant company restructuring, the operating profit of periods after the fourth quarter of 2018 is poorly comparable with the operating profit of earlier periods, explained the statistical office in its release.
Image source: Statistics Finland.
Interest income and expenses
Credit institutions engaged in banking in Finland accumulated in the first quarter of 2019 a total of 2.7 billion euros in interest income. Their interest expenses amounted to 1.7 billion euros. The net income from financial operations calculated as the difference between these was about one billion euros.
Relative to the quarter one year ago, the net income from financial operations grew among bank groups most for Finnish commercial banks. This was, however, significantly influenced by the large company restructuring made in the Finnish banking sector in the fourth quarter of 2018, explained Statistics Finland.
Administrative expenses are a significant expense item for banks operating in Finland. Banks’ administrative expenses amounted to 1.7 billion euros in the fourth quarter. Wages and salaries made up 843 million euros or 50.7 per cent of administrative expenses.
The aggregate value of the balance sheets of banks was 720 billion euros. Of this, the share of equity was, on average, 5.9 per cent or 42 billion euros.
Cooperative banks belonging to OP Financial Group had the biggest share of equity in the balance sheet, around 12.3 per cent and foreign banks the smallest, around 0.3 per cent.
On average, the share of equity in the total of the balance sheets for all banks operating in Finland rose by 1.8 percentage points from one year back.
The large company restructuring made in the banking sector in the fourth quarter of 2018 had a significant effect on the banks’ combined balance sheet and amount of equity.