The merged banks would not have been able to increase the financing of companies in their own area of \u200b\u200boperation on their own. Now, a large balance sheet and differences in demand between companies’ industries make it easier to grant loans.
The merger of Oulu and Tornio cooperative banks and Pohjola Osuuspanki, which had its headquarters in Rovaniemi, will take effect on May Day. The new Pohjolan Osuuspankki, which covers Northern Finland very widely, will open its doors on May 2.
The new bank has almost 250,000 customers, more than 700 million euros of own funds and more than 300 employees. It is the second largest cooperative bank in Finland.
The cooperative bank of the Kemi region was also available for a bank merger, but the bank’s representative board decided to stay out of it by a vote of 14–9.
The operation of the new banking organization officially begins on May 12. That’s when the representative council, supervisory council and board meetings are organized in Rovaniemi.
– There, the representative council chooses the supervisory board, which chooses the board and CEO for the new bank. Then we’ll get back to normal, says Posio.
A three-legged giant
According to Posio, traditionally in Oulu, Osuuspankki has financed a lot of construction, in Lapland almost everything is related to tourism, and in Tornio, on the other hand, we are in industrial Lapland. Now the bank’s credit portfolio is diversifying, which enables new financing for these industries.
– As separate banks, it would have been challenging in the future because they have already been financed so much. To put it in Finnish, we no longer have all our eggs in one basket when we are operating with a sufficiently broad balance sheet.
The authority that supervises banks and the regulations governing the operation of banks also demand their part.
– Now we are able to operate as a sufficiently large bank also in terms of risk management, which is necessary through the supervisor’s claims.
According to Posio, tourism in Lapland, for example, would have the opportunity to double its operations.
However, as an independent bank, Pohjola co-operative bank would not have had the opportunity to increase the financing of tourism investments in a similar way, because tourism companies already had such a dominant position in the bank’s loan balance sheet.
– Through the balance sheet, it would have been a tough challenge for us. We have a big future in terms of tourism as well, but in addition to that we have a lot of mining projects and projects related to the green transition that require investments here in the north.
Services are promised to improve for individuals and companies
According to Posio, the merged bank also has the opportunity to improve its banking services. The purpose is to invest in telephone services and training, among other things.
– Among other things, the senior handset will be available to us very soon, so that customers from Lapland can also call a person from the north and ask how banking matters should be handled. We also intend to provide the direct phone numbers of the employees for use.
Bigger shoulders also make it easier to serve business customers, Posio promises.
– In terms of business operations, a larger bank is better able to maintain expertise. For example, expertise in wealth management services or legal matters requires a lot of experts. When we are a bigger organization, we are able to ensure that that expertise develops.
\”Competition pushes mortgage interest margins down\”
According to Posio, the demand for home loans is pretty much the same everywhere in Northern Finland, and the demand for home loans is surprisingly lively at the moment.
Based on that, the housing market would be returning to normal.
– But at the moment, buyers are still clearly more prudent, that is, those credit decisions are not yet realized in credit withdrawals. I’m interested to see if the housing market will start at a normal pace in the spring, but the quiet period is behind us, says Posio.
Many mortgage debtors have wondered about the situation where banks are making a big profit, even though interest rates and prices have risen sharply and many have difficulty repaying their debt – especially if the mortgage is not protected against rising interest rates.
However, according to Posio, such a situation will not last long, as the competition will lower the banks’ interest margins. In addition, the increased interest rates are also disciplining the banks, albeit with a delay.
– The rapid rise of Euribor has caused banks’ profits to increase. But as time goes on, the cost of raising funds for banks will also rise. The competition makes sure that the situation is not like this forever.
Quiet in Oulu – Tourism investments are already being considered in Lapland
The situation for companies in Northern Finland is twofold: Tourism in Lapland is already starting to plan more investments, while the situation in Oulu is quiet for now.
– It has been a really rocky sky for many, but especially for tourism in Lapland. Good work has been done by tourism entrepreneurs. Sure, it’s been tough, but now Lapland’s tourism operators have reportedly started thinking about investments again.
– The business side of the Oulu region is much calmer at the moment than it sounds like it is in Lapland. This is exactly the difference in demand of various industries that will continue to exist in the future, and that will smooth out our financing opportunities.
All in all, Posio praises its business customers for having survived the financial crisis of recent years well.
– During these difficult years, during the Corona period and during the war of aggression in Russia, the customers have managed their affairs well, despite the fact that inflation has been restrained and interest rates have risen. The situation is good and calm about that.