Oma Sp, Finland’s most profitable bank, has seen significant growth and profitability in recent years. However, the company’s valuation does not reflect this success as it is one of the cheapest shares on the Helsinki Stock Exchange. Despite its high expectations, Oma Sp did not meet them in the last quarter with a comparable result before taxes of 38.8 million euros falling short of analysts’ expectations of 45.5 million euros. Since then, the bank’s share price has fallen by more than eight percent. The bank’s p/e ratio is below six, making it the cheapest rated domestic bank according to Inderes analysis house.
Oma Sp has been able to win market shares year after year, growing organically four times faster than the general market in between 2017 and 2022. The bank’s return on equity rose to 21.5% and was a record 25.3% for the whole year. By comparison, a return on equity of 12-13% is generally considered a strong performance for banks. However, in terms of loans/deposits ratio in December 2022, Finland was at 138%, while the EU average was at 109%. In contrast, Oma Sp had a ratio of 155% in that period which may be considered relatively high compared to other countries but also indicates their focus on lending activities rather than savings services like many other banks do nowadays .
Oma Sp mainly focuses on retail banking and offers its customers banking services both through its own balance sheet and by brokering products from partners like JPMorgan Chase or Bank of America for instance . It is important to note that Oma Säästöpankki has achieved significant growth without relying heavily on asset management services which could have slowed down their expansion if implemented . Nevertheless, asset management services could still play an important role in accelerating growth and raising return on capital even more .