Finnvera’s role in society

Finnvera has an important social role in facilitating and augmenting enterprise activities. Finnvera reinforces the capacity and competitiveness of Finnish enterprises. As a promoter of exports, Finnvera wants to offer Finnish companies the same starting points as those offered by export credit agencies of competitor countries in their own countries.

Wood exploited to its full potential – The Äänekoski bioproduct mill is the driver of growth in Central Finland

Sometimes opinions change swiftly. Some were already prepared to write off the entire Finnish forestry industry as a thing of the past, despite the fact that the investments of forestry companies – even during the darkest years of financial crisis – were worth more than EUR 500 million every year.

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Risk mitigation is an element of export credit insurance

Through reinsurance, Finnvera prepares for increased exposures and, in particular, strives to mitigate the concentration of risks in certain sectors.

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EUR 7.5 billion

Finnvera granted export credit guarantees and special guarantees EUR 7.5 billion as well as export credits EUR 6.6 billion year 2017.

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The main indicators of impacts include the number of new enterprises and jobs created by means of financing and the ratio of exports covered by export credit guarantees to Finland’s total exports. Finnvera’s new value creation model provides a comprehensive overview of the financial, society-related, social and environmental impacts of Finnvera’s operations, along with key indicators.

Other indicators of Finnvera’s impacts are the volume of SME and midcap financing and the financed transfers of ownership. The central issue in pursuing impacts on society is responsibility as an element of daily work. Provision of financing for economically viable business and meticulous risk assessment in financing decisions lay the foundation for everything else.

”Provision of financing for economically viable business and meticulous risk assessment in financing decisions lay the foundation for everything else. ”

Possukaavio

Self-sustainability and capital adequacy as cornerstones

According to the goal of self-sustainability set for Finnvera’s activities, the company’s income from business operations must be sufficient in the long term to cover its operating expenses and its share of any credit and guarantee losses incurred.

The State of Finland covers some of Finnvera’s credit and guarantee losses. This enables Finnvera to take greater risks in its financing operations than other providers of financing.

Self-sustainability in Finnvera’s SME financing has been attained over a 12-year period when the cumulative result is calculated up to the end of December 2017. Export financing has been economically self-sustainable for all of Finnvera’s 19 years of operation. If the payment-based result of Finnvera’s predecessor, the Finnish Guarantee Board, for its last years of operation is taken into account when reviewing the self-sustainability of export financing, economic self-sustainability is also realised over a 22-year period.

Finnvera’s capital adequacy must be sufficient to ensure the company’s ability to bear risks and to keep the costs of funding reasonable. Finnvera’s capital adequacy must be at least 12 per cent. At the end of 2017, the capital adequacy for domestic operations was 25.3 per cent (22.4%).

Key indicators for financial responsibility
       
Finnvera Group, MEUR 2017 2016 2015
Revenue      
-Net interest income, and fee and commission income and expenses 173.5 194.2 197.3
Subsidies and compensation for losses      
-Interest subsidies passed on to clients 0.8 1.5 3.4
-Compensation for credit and guarantee losses 22.8 28.3 82.6
Impairment loss on financial assets 41.4 94.0 97.2
Administrative expenses      
-Personnel expenses 28.7 29.9 30.4
-Other administrative expenses 14.4 14.1 13.6
Amortization and other operating expenses 4.5 6.7 5.7