CEO's Review

The year 2017 was a year of good financial news, and Finnish enterprises were able to join the upturn in the international economy. In the important export sectors, especially in cruise shipping, telecommunications, energy and forestry sectors, the outlook is good.

At Finnvera, this could be seen as record-breaking demand for export credits and export credit guarantees. It was exceptional that in the EUR 22.2 billion exposure for large corporates' export credit guarantees and special guarantees, drawn guarantees and credits accounted for approximately EUR 9.0 billion. This means that more than half of the exposure was tenders or agreements that are related to future deliveries by export companies. Demand extending this far into the future has not been previously witnessed at Finnvera.

”Demand extending this far into the future has not been previously witnessed at Finnvera.”

We have been able to respond to the increasing demand, thanks to the fact that in 2016, the State of Finland significantly raised our authorisation to grant export credit guarantees to EUR 27 billion and to finance export credits to EUR 22 billion. This action was taken in order to enable the foreseeable growth of export industry by means of financing.

We are grateful for these necessary measures that generate growth in Finland and jobs amounting to tens of thousands of person-years.

At the same time, the significance of risk management is further increasing. The Ministry of Economic Affairs and Employment commissioned an external assessment of Finnvera’s risk management. The assessment was conducted by an international team of and published in March 2017. According to the assessment, our risk management is at an excellent level in international comparison. We constantly develop our risk management, and in the future, we will invest heavily in reinsurance and other risk transfer methods.

Throughout its history, Finnvera’s export credit guarantee activities have been self-sustainable and our performance has been profitable, which has enabled us to accumulate approximately EUR 1.4 billion in buffer assets for potential future losses. In line with our goals, the result for the financial period 2017, EUR 107 million, showed a profit. This result improves our ability to cover current and future commitments.

Financing spurs growth

Economic activity and investments picked up also in Finland; however, this did not directly lead to growth in Finnvera’s SME and midcap financing. For its part, the European Fund for Strategic Investments (EFSI) replaces or complements our financing offering, and EFSI financing has proved to be easily found by Finnish enterprises. This is a good indication of corporate financing options becoming more versatile.

Finnvera encourages growth. In line with our strategy, we target our financing first and foremost at corporate changes – that is: setting up a company, growth, internationalisation and transfers of ownership – not at providing financing to established enterprises focusing on the domestic markets. Currently, 80 per cent of our financing is already allocated to our focus areas.

Transfers of ownership are known to have a dynamic impact, and an acquisition often spurs enterprises onto a growth track. Finnvera’s and enterprise organisations’ joint campaign to accelerate transfers of ownership continued in 2017. Finnvera was involved in financing approximately 1,000 transfers of ownership. This means that we acted as a provider of financing in roughly more than a third of the transfers of ownership that took place in Finland. This area gained a lot of visibility, which goes to show that the significance of company acquisitions for business life has been recognised.

Responsible impact

According to our strategy, impact is one of the key indicators of our success. With our financing we enable the founding of companies that otherwise would not have been set up. Growing and internationalising enterprises create innovations, export products and networks that are important for the nation. Export companies get the chance to submit tenders on the same terms as the competitor countries’ exporters. The common denominator in impact is the fact that enterprises grow and become more international in a manner that would not have been possible without Finnvera.

The results of our impact study show that Finnvera has played an important role in the renewal of the Finnish shipbuilding industry. This, in turn, has been vitally important for many other industries and businesses that are dependent on the shipbuilding industry.

”The common denominator in impact is the fact that enterprises grow and become more international in a manner that would not have been possible without Finnvera.”

Finnvera is a responsible provider of financing. In addition to supporting employment and economic growth in Finland, responsibility also has an international dimension. The environmental and social impact assessment of major export projects directed to different parts of the world is a more crucial part of the financing decision. Good governance and transparency are the starting points of Finnvera’s operations. The foundation for corporate responsibility is recorded in our Code of Conduct. We develop corporate responsibility also in cooperation with counterpart organisations in other countries.

Highlighting digitalisation and customer experience

Digitalisation is a financing trend that affects us. Clients have increasing expectations with regard to fast service and the transparency of financing decisions. We have prepared a digital agenda, in which we define how we will create a good customer experience in electronic services in the future and how we will digitalise our operations to an appropriate extent.

In addition to digitalisation, customer experience is one of the cornerstones of our strategy. In 2017, we conducted an extensive client and stakeholder survey, the results of which we will utilise in the further development of our operations. We also continued to measure client satisfaction continuously.

An underlying factor for client satisfaction is the personnel’s uncompromising commitment to their work, and I would like to thank all my colleagues at Finnvera for their excellent work in 2017. Many thanks also to our owner and our clients, partners and stakeholders for fruitful cooperation.

A new year opens up new opportunities for working together with Finnish enterprises to promote growth, internationalisation and successful exports.

Pauli Heikkilä
CEO