Contraction of net income from financial operations and impairment losses weakened banks’ results in 2009

Domestic banks’ net operating profit totalled EUR 2.1 billion in 2009. Compared with 2008, the net operating profit decreased by 17 per cent. Twenty per cent of the net operating profit in 2009 was generated in the last quarter of the year.

Domestic banks’ net operating profit (loss) in 1989 - 2009

Lowering of the net operating profit was partly due to the 18 per cent decrease in net income from financial operations to EUR 3.4 billion. The fall in the net income from financial operations is particularly explained by diminished difference in interests on the loan and deposit stocks, i.e. interest margin. Because of the fallen level of interest rates both interest income and interest expenses declined strongly compared with 2008.

Recorded impairment losses on loans and other commitments amounted to EUR 765 million, which is 232 per cent more than in the previous year. The strong rise in impairment losses that started in the early part of 2008 halted in the last quarter.

Brisk growth in commission income and net income from securities and foreign currency transactions had a positive effect on the banks’ result. Commission income rose by 11 per cent to EUR 1.4 billion. Payment transactions and lending generated the largest proportions of the commission income for the banks. Net income from securities and foreign currency transactions amounted to EUR 1.1 billion, having grown by as much as 369 per cent year-on-year.

The aggregate value of the balance sheets of domestic banks was EUR 347 billion at the end of 2009. The balance sheets grew by one per cent year-on-year. The share of own equity in the total of the balance sheets was 5.8 per cent.

Source: Financial statement statistics on credit institutions, Statistics Finland

Inquiries: Marja Keltanen (09) 1734 3328, Saara Roine (09) 1734 3325, rahoitusmarkkinat@stat.fi

Director in charge: Ari Tyrkkö

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Updated 01.04.2010

Referencing instructions:

Official Statistics of Finland (OSF): Financial statement statistics on credit institutions [e-publication].
ISSN=2342-5180. 4th quarter 2009. Helsinki: Statistics Finland [referred: 22.11.2024].
Access method: http://www.stat.fi/til/llai/2009/04/llai_2009_04_2010-04-01_tie_001_en.html