Finnvera Group’s Report of the Board
of Directors and Financial Statements
Q4/2022 and 1 Jan–31 Dec 2022
Finnvera Group, Stock Exchange Release 16 February 2023
Report of the Board of Directors
and Financial Statements 2022
Finnvera’s domestic and export financing reached a high
level despite uncertainty in the operating environment
– the Group result was EUR 55 million
Finnvera Group, summary, year 2022 (vs. 2021)
•
Result 55 Me (153) – The loss provisions for exposure in Russia
remained unchanged, the loss provisions made in the cruise shipping
sector were reduced and the loss provisions for the domestic financing
increased in the last quarter of the year.
•
Result by segment: result of the parent company Finnvera plc’s SME and
midcap business stood at MEUR -54 (34) and that of Large Corporates
business at MEUR 78 (73). The subsidiaries’ impact on the Group’s
profit was MEUR 32 (45).
•
The parent company Finnvera plc’s result for domestic operations was
MEUR -25 (33) including a profit of MEUR 8 from the merger of the
subsidiary Veraventure Ltd. The separate result for the parent company’s
export credit guarantee and special guarantee operations MEUR 56 (79).
•
Total liabilities of the parent company Finnvera plc increased by 4% to
EUR 26.6 bn (25.6).
•
Balance sheet total EUR 12.6 bn (12.2) increased by 3%.
•
Contingent liabilities EUR 16.6 bn (15.9) increased by 4%.
•
Non-restricted equity and the State Guarantee Fund (the buffer
reserves) increased by 4% to EUR 1.4 bn (1.4) in total.
•
Expected credit losses on the balance sheet EUR 1.5 bn (1.4) increased
by 10%.
•
Equity ratio improved by 0.1 pp to 7.2% (7.1).
•
The expense-income ratio improved by 2.8 pp to 20.7% (23.5).
•
The NPS index improved by 5 points to 72 (67).
CEO Pauli Heikkilä:
“Despite the impacts of the coronavirus pandemic, the war launched
by Russia and the uncertain operating environment as well as inflation,
Finnish companies were very active in 2022, and the demand for Finnvera’s
financing remained at a high level. The reasons for this include Finnish
industry’s focus on investments and the post-cyclical response of Finnish
economy. Companies continued to carry out ongoing large-scale projects.
Finnvera granted domestic loans and guarantees amounting to EUR 1.0
billion (1.5). More than 90% of the financing was allocated to Finnvera’s
strategic priorities, that are start-ups, companies aiming for growth and
internationalisation and, for example, transfers of ownership. The level
of financing remained higher than in the pre-pandemic era or at any time
in the 2010s. Finnvera financed large corporates in Finland within the
framework of the European Investment Bank’s EGF guarantee programme.
Finnvera granted EUR 5.9 billion (4.6) in export credit guarantees and
special guarantees, and EUR 0.9 billion (0.7) in export credits. The largest
individual financing projects concerned forest sector deliveries to Brazil
and telecommunications sector deliveries to the United States and Japan.
The annual volume of export financing is always influenced by the timing
of individual major export transactions. No new vessel orders were made
in cruise shipping. The German shipyard MV Werften and its owners were
placed in liquidation. In 2019, Finnvera guaranteed the deliveries made by
Finnish companies to the shipyard, and Finnvera has paid a total of EUR
100 million in compensation for liabilities at the beginning of February
2023. The final amount of Finnvera’s losses will be determined later.
However, it is estimated that, due to the loss provisions in place, the losses
will no longer have a profit impact. Globally, however, there are signs of
recovery in the cruise shipping sector.
The Finnvera Group’s result for 2022 was EUR 55 million (153). The
result was impacted by changes in the amounts of credit and guarantee
loss provisions, in particular. The business outlook of cruise shipping
companies has improved, and the credit risk of Finnvera’s liabilities is
believed to have decreased. On these grounds, EUR 150 million of the
extensive loss provisions for export guarantee and special guarantee
operations made in 2020 were reduced. Due to the war and arrangements
necessitated by sanctions, Finnvera’s exposure relating to Russia more
than halved to EUR 422 million during the year, but the credit risk and the
need for loss provision are not expected to have decreased significantly.
The result for domestic financing in 2022 showed a loss as a result of
Finnvera Group, year 2022 (vs. 2021)
Result for the period
55 MEUR
(153), change -64%
Balance sheet total
EUR 12.6 bn
(12.2), change 3%
Total exposure, the parent
company’s domestic, export
credit guarantee and special
guarantee operations
EUR 26.6 bn
(25.6), change 4%
Non-restricted equity
and The State Guarantee
Fund after result for
the period
EUR 1.4 bn
(1.4), change 4%
Expense-income ratio
20.7%
(23.5), change −2.8 pp
Equity ratio
7.2%
(7.1), change 0.1 pp
NPS index
(net promoter score)
72
(67), change 5 points
Expected credit losses based
on the balance sheet items
EUR 1.5 bn
(1.4), change 10%
2Annual Report 2022
Finnvera Group, Stock Exchange Release, 16 February 2023
the State’s credit and guarantee loss compensation being reduced back
to 50% from the beginning of 2023. In the early stages of the coronavirus
pandemic in 2020, this compensation was temporarily increased to 80%.
Finnvera has achieved cumulative self-sustainability, taking into account
the assets of the State Guarantee Fund accumulated by Finnvera’s
predecessor organisations. However, the buffer for covering potential
future losses has been reduced significantly. The task of the State
Guarantee Fund is to cover Finnvera’s losses from export credit guarantee
and special guarantee operations if the reserve on the company’s balance
sheet is not sufficient.
In line with our strategy, we are diversifying our financing solutions in
support of business growth and promote exports through our financing.
Sustainability and especially climate change mitigation are at the centre of
our strategy. We develop our operations and bring new financing solutions
available to companies, including direct export credits for foreign buyers
intended for accelerating export transactions as well as a climate and
environment loan and a digitalisation and innovation loan backed by the
InvestEU Programme.”
Finnvera Group
Financing granted in 2022 (vs. 2021)
•
Domestic loans and guarantees granted: EUR 1.0 bn (1.5), change -32%
•
Export credit guarantees and special guarantees granted, incl. SME
and midcap export credit guarantees: EUR 5.9 bn (4.6), change 29%
•
Export credits granted: EUR 0.9 bn (0.7), change 35%
• The credit risk for Finnish Export Credit Ltd’s export credits is
covered by the parent company Finnvera plc’s export credit
guarantee.
• The fluctuation in the amount of export credit guarantees and
export credits is influenced by the timing of individual major export
transactions.
Exposure, 31 December 2022 (vs. 31 December 2021)
•
Exposure, drawn domestic loans and guarantees: EUR 2.7 bn (3.0),
change -10%
•
Exposure, export credit guarantees and special guarantees, incl. SME
and midcap export credit guarantees: EUR 23.9 bn (22.6), change 6%
• Drawn exposure: EUR 14.1 bn (12.1), change 16%, of which Large
Corporates’ cruise shipping exposure EUR 6.6 bn (5.4)
• Undrawn exposure: EUR 7.9 bn (7.4) and binding offers EUR 1.9
bn (3.1), in total EUR 9.8 bn (10.5), change -7%, of which Large
Corporates’ cruise shipping exposure in total EUR 6.1 bn (6.4).
•
Exposure, export credits drawn: EUR 7.5 bn (7.9), change -6%
Financial performance
The Finnvera Group’s result for January–December 2022 was EUR 55
million (EUR 153 million). The result was affected by the fact that
the extensive loss provisions for export credit guarantee and special
guarantee operations relating to cruise shipping made in 2020 were
reduced by EUR 150 million in the last quarter of the year. While shipping
companies’ business outlook has improved and the credit risk of
Finnvera’s exposure is expected to have decreased, significant risks
Finnvera Group Q4/2022 Q4/2021 Change 1-9/2022 2022 2021 Change
Financial performance MEUR MEUR % MEUR MEUR MEUR %
Net interest income 19 15 27% 50 69 55 24%
Net fee and commission income 49 49 0% 155 204 167 22%
value through P&L and foreign exchange gains and losses
-10 0 - 3 -6 2 -
Other operating income -41 4 - 42 0 4 -94%
Operational expenses -14 -14 1% -35 -49 -46 8%
Other operating expenses and depreciations -1 -2 -24% -5 -6 -8 -27%
Realised credit losses and change in
expected credit losses, net
74 -2 - -222 -148 -11 -
76 51 50% -12 64 164 -61%
75 47 60% -19 55 153 -64%
persist. Total exposure relating to Russia decreased from EUR 977
million to EUR 422 million due to arrangements made during the year and
repayments, but the credit risk of these liabilities and the need for loss
provisions are not believed to have decreased significantly. No significant
individual final credit losses were realised in 2022.
The result for domestic financing in 2022 showed a loss as a result of
the State’s credit and guarantee loss compensation being reduced back
to 50% as from 1 January 2023. In the early stages of the coronavirus
pandemic in 2020, this compensation was temporarily increased to
80%. An exception to this rule in the new credit and guarantee loss
compensation commitment that entered into force on 8 December 2022
is financing granted on special industrial policy grounds, in which the
loss compensation rate may still be 80% by decision of the Ministry of
Economic Affairs and Employment.
The net interest income and net fee and commission income improved
in January–December compared to the previous year and also compared
to the pre-pandemic years. The net interest income was EUR 13 million
higher than in the previous year, especially as a result of increase in the
3Annual Report 2022
market interest rate and investment position. Correspondingly, net fee
and commission income increased by EUR 37 million compared to the
previous year, in particular due to the fee and commission income from
arrangements made and recognition of guarantee premiums received in
advance from early repayments of liabilities.
Taking into account the result for 2022, Finnvera’s domestic and export
financing reserves for covering potential future losses amounted to a total
of EUR 1,260 million (1,224) at the end of December. The non-restricted
equity for domestic financing was EUR 374 million (399) and the non-
restricted equity for export credit and special guarantee financing as well
as assets in the State Guarantee Fund for covering a loss-making result
totalled EUR 886 million (825). The domestic and export financing reserves
can not subsidise each other.
Outlook for financing
The uncertain economic outlook may affect the demand for Finnvera’s
financing and, in particular, the financing of SME investments in 2023.
Finnvera will be able to meet the financing needs of companies within its
financing authorisations. Finnvera has prepared for a need for flexibilities
and instalment-free arrangements arising from the challenges in the
operating environment for companies that have the prerequisites for
profitable business.
Rising energy prices and interest rates will affect both consumers and
companies, especially from the perspective of domestic financing. Banks
have access to a higher number of EU financial instruments than before,
which may reduce demand for domestic financing from Finnvera. Backed
by the InvestEU guarantee programme, Finnvera will introduce a new
climate and environment loan as well as a digitalisation and innovation
loan for companies’ sustainability and business development projects in
the first half of 2023. Through our financing, we encourage companies to
seize the business opportunities created by climate action.
By diversifying the financing offered, we will strengthen further the
support we are providing for the establishment, transfers of ownership,
growth and internationalisation of Finnish companies. In particular,
direct export credits intended to accelerate SMEs’ exports and smaller
export transactions will improve the availability of financing for export
transactions worth less than EUR 20 million.
The overall demand for export credit guarantees and export credits is
expected to remain at previous years’ levels. The overall demand will be
affected by the realisation of individual major projects. It is likely that the
challenges in the operating environment will appear in different ways in
the financing situation of different sectors, and geographically, the tougher
financing situation will probably have a particular impact on emerging
markets. The focus of demand for export financing will probably be on the
forest and telecommunications sectors. The outlook for cruise shipping and
the demand for export financing are strongly influenced by how the shipping
companies recover from the impacts of the coronavirus pandemic.
While no material individual export credit guarantee losses were realised
in 2022, the Finnvera Group’s credit risk level remains very high due to
the unstable geopolitical situation and uncertain economic outlook. In
particular, cruise shipping and exposure relating to Russia are associated
with uncertainties, causing significant uncertainty to Finnvera Group’s
result development in 2023. The Group’s profit or loss will be determined
by realised credit losses and changes in loss provision amounts.
Further information:
Pauli Heikkilä, CEO, tel. +358 29 460 2400
Ulla Hagman, CFO, tel. +358 29 460 2458
Finnvera publishes the Report of the Board of Directors and the Financial
Statements as an XHTML file according to the European Single Electronic
Oy has provided an independent auditor’s reasonable assurance report
on Finnvera’s ESEF financial statements. The XHTML file is available in
Finnish and English. In addition, Finnvera publishes the Report of the Board
of Directors and the Financial Statements as a pdf report.
Finnvera Group’s Report of the Board of Directors and Financial
Statements 1 January – 31 December 2022 (PDF)
The documents and the Annual Report are available in Finnish and English
at www.finnvera.fi/financial_reports
Distribution:
NASDAQ Helsinki Ltd, London Stock Exchange, the principal media,
www.finnvera.fi/eng
Finnvera publishes quarterly reports.
4Annual Report 2022
Impact
Our vision is:
Our clients' success strengthens the Finnish economy
C
o
m
p
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t
e
n
t
p
e
r
s
o
n
n
e
l
w
i
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o
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a
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a
g
e
t
o
m
a
k
e
i
m
p
r
o
v
e
m
e
n
t
s
Values:
For a good cause
Better together
Let’s get started
Courage to solve
We promote customer
experience and
digitalise our activities
We diversify
funding solutions
to enable growth
We are a stable
promoter of
exports
We strengthen
partnerships and
cooperation models
How Finnvera creates value
Basis of strategy:
Environmental sustainability, social responsibility,
good governance, financial responsibility, risk management
Number of clients
31Dec 2022: 24,400
• Micro-enterprises: 86%
• SMEs and midcap enterprises: 13%
• Large corporates: 1%
Products and services 1-12/2022
Loans and guarantees granted
• EUR 1.0 billion in total
Export credit guarantees and
• EUR 5.9 billion in total
Export credits granted
• EUR 0.9 billion in total
Authorisations and
exposures 31 Dec 2022
Exposures include credit commitments
as well as guarantee receivables
Loans and guarantees
• authorisation EUR 12 billion
• exposure EUR 2.7 billion
Export credit guarantees
• authorisation EUR 38 billion
• exposure EUR 23.5 billlion
Export credits
• authorisation EUR 33 billion
• exposure EUR 12.6 billion of which
• drawn EUR 7.5 billion
Special guarantees
(shipping and environmental guarantees
and raw material guarantees)
• authorisation EUR 3.15 billion
• exposure EUR 0.5 billion
Exposure on 31 Dec 2018 2019 2020 2021 2022
12,835 13,786 10,938 11,308 12,262
2,243 2,901 2,886 3,526 4,008
4,487 4,055 3,688 3,303 3,345
2,440 2,478 2,539 2,129 2,409
478 332 290 693 707
492 684 616 606 559
497 1,108 1,215 840 407
Total 23,473 25,344 22,172 22,405 23,697
*Including other risks such as state and bank risks and reinsurance risk transfer.
Exposure by sector 31 Dec 2022, %
Export credit guarantees and special
guarantees, in total 23,697 MEUR
2
Exposure by sector 31 Dec 2022, %
Loans, guarantees and export
guarantees, in total 2,603 MEUR
3
Export credit guarantees and special guarantees, 5-year-trend of exposure by sector, MEUR
Export credit guarantees and special guarantees, 5-year-trend of exposure by sector, MEUR
1
5Annual Report 2022
Finnvera finances various
stages of business with loans,
guarantees and export credit
guarantees. Finnvera is a
specialised financing company
owned by the State of Finland.
Finnvera has ocial Export
Credit Agency (ECA) status.
Finnvera Group’s Report of the Board of
Directors and Financial Statements
.....................................7
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..................................61
.............. 75
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................................................................ 81
....84
...........................85
6
Signatures and
Auditor’s report
Financial
Statements
Notes to the
financial statements
Report of the
Board of DirectorsAnnual Report 2022
Capital adequacy, Tier 1
Domestic
operations
25.7%
(31 Dec 2021: 23.9%)
Export
financing
3.2%
(31 Dec 2021: 3.4%)
Finnvera Group
Result for the period
55 MEUR
(2021: 153 MEUR)
Balance sheet total
EUR 12.6 bn
(31 Dec 2021: EUR 12.2 bn)
Contingent liabilities
EUR 16.6 bn
(31 Dec 2021: EUR 15.9 bn)
Expense-
income ratio
20.7%
(2021: 23.5%)
Equity ratio
7.2%
(31 Dec 2021: 7.1%)
Non-restricted equity and The State
Guarantee Fund after result for the period
EUR 1.4 bn
(2021: EUR 1.4 bn)
Report of the
Board of Directors
Finnvera’s goal is, by means of financing,
to promote the operations and
growth of enterprises as well as the
internationalisation and export.
374
399
Reserve for domestic financing, MEUR*
4
Reserves for export financing, MEUR*
5
7
Signatures and
Auditor’s report
Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
Report of the Board of Directors
Year 2022 was marked by the war launched by Russia,
the uncertainty in the operating environment and high
inflation. The coronavirus pandemic also continued to
have significant impacts on the global economy. Despite
the uncertainty and newly weakened economic outlook,
Finnish economy grew in 2022, supported by consumption
and investments. Finnish companies were very active,
and Finnvera’s financing remained at a high level. While
the outlook is cautious, the energy crisis is opening up
new growth opportunities for companies, including in
green transition projects. In line with its strategy, Finnvera
developed financing products for projects relating to
solutions for climate change mitigation as well as digi-
talisation and exports. Mounting expectations and trans-
parency requirements are associated with sustainability,
and Finnvera responds to this challenge by developing its
operations, product range and responsibility reporting.
Total exposure increased, companies’ solvency remained good
Finnvera’s total exposure increased in 2022 as a result of large individual
projects in export financing. Total exposure at year end, including binding
financing offers and agreements, totalled EUR 26.6 billion, whereas they
amounted to EUR 25.6 billion at the end of the previous year.
The domestic loan and guarantee exposure decreased by 10% to EUR 2.7
billion during the year, mainly due to some individual large repayments. The
exceptional situation caused by the coronavirus pandemic that began in 2020
was no longer reflected in credit arrangements, and the unstable geopolitical
situation has so far had no major impacts on SMEs’ credit arrangements. The
export credit guarantee and special guarantee exposure increased by 6% to
EUR 23.9 billion during the year. At the end of 2022, binding financing offers
or agreements related to future deliveries by export companies accounted for
around 40% of the export credit guarantee and special guarantee exposure.
The Group turned a profit and achieved cumulative
self-sustainability
The Finnvera Group’s result for 2022 was EUR 55 million (153). Compared
to the previous year the result was affected particularly by changes in the
amounts of loss provisions for export financing as well as the fact that the
State’s credit and guarantee loss compensation for Finnvera’s domestic
financing was reduced back to the pre-pandemic level from the beginning of
2023, which increased the amount of loss provisions for domestic financing.
Finnvera turned a profit in export financing in 2022. This situation was
affected by the dissolution of extensive loss provisions made in the cruise
shipping sector in 2020 for export credit guarantees and special guarantees
by EUR 150 million in the last quarter of 2022. Shipping companies’ business
outlook has improved and the credit risk of Finnvera’s liabilities is expected
to have decreased but significant risks persist. While total exposure relating
to Russia decreased from EUR 977 million to EUR 422 million due to
arrangements made in 2022 and repayments, the credit risk of the exposure
is not expected to have decreased significantly, and the loss provisions of
EUR 210 million made at the beginning of the year were not reversed. No
significant individual final losses were realised in export financing in 2022.
A loss was made in domestic financing in 2022 as a result of the State’s
credit and guarantee loss compensation being reduced back to 50% as of 1
January 2023. In the early stages of the coronavirus pandemic in 2020, this
compensation was temporarily increased to 80%. An exception to this rule
after the beginning of 2023 is financing granted on special industrial policy
grounds, in which the loss compensation may be 80% by decision of the
Ministry of Economic Affairs and Employment.
Finnvera is expected to attain financial self-sustainability in its operations.
This means that in the long term, the company must be able to cover
its operating expenses with income from the operations, taking into
account the assets of the State Guarantee Fund accumulated from the
operations of Finnvera’s predecessor organisations. This cumulative self-
sustainability has been achieved. However, the large loss provisions have
significantly reduced the buffer for covering potential future losses.
Pre-pandemic levels exceeded in domestic financing despite
uncertainty
In its 2022 strategy, Finnvera once again emphasised new business
growth, investments and internationalisation. The unstable geopolitical
situation, energy crisis and accelerating inflation changed the economic
outlook globally and for Finland, but in the long term the focus is on
enabling sustainable growth.
While the volume of domestic financing was extremely high in early 2022,
the change in the operating environment and uncertainty that followed
from the war in Ukraine reduced the demand for financing. At yearly level,
Finnvera granted a total of EUR 1.3 (1.7) billion in domestic financing to
companies, including domestic loans and guarantees as well as export
credit guarantees and export guarantees granted in the SME and midcap
business. The level of financing remained higher than in the pre-pandemic
era or at any time in the 2010s.
Of the domestic financing, 90% went to companies and target groups
identified in Finnvera’s strategy: start-ups and companies seeking growth
and internationalisation as well as investments, transfers of ownership,
export and delivery projects and SME guarantee projects.
The uncertain outlook slowed down transfers of ownership that are vital for
the regeneration of the business structure and business sector vitality in
2022. Financing for transfers of ownership fell to EUR 130 million (174), and
Finnvera was involved in the transfers of ownership of 771 companies (813).
8
Signatures and
Auditor’s report
Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
Uncertainty in the operating environment had a negative impact on investment
financing towards the end of the year. On a positive note, previously launched
investments went ahead during the year. Measured in euros, the share of
investments out of all projects financed was 34% (31%), which was higher than
in 2021. Companies seeking growth and internationalisation, which are crucial
for boosting economic growth and important for Finnvera’s strategy, accounted
for 51% (52%) of the SME and midcap financing.
In late 2022, Finnvera prepared for potential increase in needs for
instalment-free periods and future demand for working capital financing,
especially in smaller companies.
The total amount of domestic loans and guarantees as well as export
credit and export guarantees granted in SME and midcap business includes
EUR 196 (516) million of financing granted to large corporates. Finnvera
granted working capital loans to large corporates within the framework of
the European Investment Bank’s (EIB) Pan-European Guarantee Fund (EGF).
This guarantee programme continued until the end of 2022 and within the
programme Finnvera granted loans totalling EUR 301 million in 2021–2022
to different companies.
Financing diversified with new products
Finnvera sought to diversify its financing options, for example by seeking out
new partners that can grant financing to companies with a Finnvera guarantee.
Finnvera updated the terms and conditions of its entrepreneur loan at
the beginning of October 2022 to increase its flexibility and suitability for
corporate acquisitions in the future. No self-financing share is now required,
and five per cent is accepted as the entrepreneur’s shareholding in the
target company. This reform has made it possible to use the loan in larger
projects and in acquisitions of companies larger than an SME.
Background studies produced by Finnvera have found that SMEs struggle
to obtain financing for their export transactions, which slows down export
development. During the year, Finnvera prepared to launch direct export credits
to Finnish export companies’ foreign buyers for transactions worth less than
EUR 20 million. This means that Finnvera gives a guarantee for an export credit
granted by its subsidiary, Finnish Export Credit Ltd, and the arrangement does
not involve a bank. Direct export credits to buyers will become available in 10
February 2023, as the legislative amendment enabling this entered into force.
Finnvera made versatile use of EU financing. Finnvera concluded an
agreement on partnering the European Investment Fund in the InvestEU
Programme. Bolstered by the InvestEU guarantee, Finnvera will launch
a climate and environment loan intended for companies’ climate and
environment positive investments, and a digitalisation and innovation loan
for business development in the first half of 2023.
Finnvera granted two loans under the Alternative Fuels Infrastructure Facility
(AFIF) of the European Commission’s Connecting Europe Facility (CEF), enabling
investments totalling more than EUR 30 million in low-emission transport.
The agreement on the European Investment Fund’s COSME LGF counter-
guarantee, which enables Finnvera to provide unsecured SME Guarantees,
continues.
Steady demand for export financing reflects
the long time span of exports
The demand for export financing remained stable in 2022. This reflects the
structure of Finnish industry and exports with large investments and long
time spans. Finnvera granted export credit guarantees and special guarantees
amounting to a total of EUR 5.7 (4.3) billion, mainly for large corporates’ export
transactions. This represented a year-on-year increase of 31%.
Finnvera grants export credit guarantees for export transactions financed
by banks. Some of the projects are financed with export credits guaranteed
by Finnvera and granted by its subsidiary, Finnish Export Credit Ltd. Export
credits granted by Finnvera amounted to EUR 0.9 (0.7) billion. While export
credits showed an increase of 35% from the year before, they remained
clearly below the pre-pandemic levels.
The direct export credits to Finnish export companies’ foreign buyers
discussed above will make export credits for transactions of less than EUR
20 million available to both SMEs and large corporates.
The annual volume of export financing is influenced by the timing of individual
major export transactions. As in previous years, telecommunications and the
pulp and paper sector were prominent in export credit guarantees granted by
Finnvera. The largest individual financing project in 2022 was the USD 800
million export credit and guarantee for Andritz’s deliveries to Brazil. In the pulp
and paper sector, Finnvera also granted an export credit guarantee of around
USD 450 million for joint deliveries by Valmet and Andritz to Brazil. The largest
export credit guarantee amounts in the telecommunications sector were USD
500 million granted to Nokia’s telecom equipment deliveries to operators in
the United States and EUR 250 million for exports to Japan.
No new vessel orders were made in cruise shipping, which has been
impacted by the coronavirus pandemic in the last few years. The German
shipyard MV Werften and its owners were placed in liquidation. In 2019,
Finnvera guaranteed the deliveries made by Finnish companies to the
shipyard, and Finnvera has paid a total of EUR 100 million in compensation
for liabilities at the beginning of February 2023. The final amount of losses
will become clear later. However, it is estimated that, due to the loss
provisions in place, the losses will no longer have a result impact.
Globally, however, there were signs of recovery in cruise shipping, even if
the unstable geopolitical situation and uncertain economic outlook cause
uncertainty in cruise demand.
Finnvera stopped granting export credit guarantees to Russia on 22
February 2022 and the Russian export market, which previously had been
quite important for Finland, practically ceased to exist. This had concrete
9
Signatures and
Auditor’s report
Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
impacts on Finnish exporters. Companies have been quite successful in
finding replacement markets, however.
The suspension of export credit guarantees for Russia was reflected in
the number of these guarantees granted in 2022, which decreased clearly
from the previous year. This reduction was also influenced by the expiry of
the European Commission’s derogation associated with the coronavirus
pandemic, after which Finnvera could no longer grant short-term export
credit guarantees without restrictions to EU countries and other Western
industrialised countries.
Finnvera typically promotes small and medium-sized export transactions
by means of credit insurance and documentary credit guarantees. The
demand for documentary credit guarantees increased in 2022, especially
as a result of forest industry exports to Turkey and North Africa. The use
of documentary credit guarantees reflects Finnvera’s role in sharing the
political risks associated with export trade and is a sign of banks wishing
to rely, to an increasing extent, on Finnvera as a guarantor of risks.
At the end of 2022, Finnvera had exposures for export credit guarantees
and special guarantees relating to 94 countries, and in 17 countries, the
exposure exceeded EUR 100 million.
Risk protection through reinsurance
For several years, Finnvera has actively developed the hedging of the
risks it carries. The maximum indemnity amount of Finnvera’s reinsurance
arrangements at the end of 2022 was EUR 1.4 (1.2) billion, or 10% of
the drawn guarantees. The value of new reinsurance cover in 2022 was
approximately EUR 600 million. Due to the coronavirus pandemic, some of
the planned reinsurance was not needed.
Finnvera issued a EUR 1 billion bond
The funding amount for 2022 estimated in Finnvera’s funding plan was
EUR 1.0–1.5 billion. In September 2022, Finnvera issued a EUR 1 billion
bond that will mature in March 2028. The bond attracted more than 115
investors and was oversubscribed four times. This great interest indicates
investors’ strong trust in Finnvera’s creditworthiness and the State of
Finland’s guarantee despite a challenging market situation.
Finnvera uses the acquired funds for financing export credits. The goal of
the funding is making competitive financing available for the customers of
Finnish export companies.
Finnvera issues long-term debts, mainly under the EUR 15 billion EMTN
debt programme. From the beginning of 2022, short-term funding has
been obtained under the EUR 3 billion ECP debt programme. Both loan
programmes are guaranteed by the State of Finland. At the end of 2022,
the outstanding bonds issued under the EMTN programme amounted to
approximately EUR 10.1 (10.0) billion.
A high level of satisfaction for Finnvera’s 24,400 customers
Finnvera’s number of customers decreased, totalling around 24,400 at year
end (25,800). The customers were highly willing to recommend Finnvera’s
services, and the net promoter score (NPS) was better than ever at 72 (67).
The customers were also highly satisfied with the information they received
through Finnvera about the growth and internationalisation services provided
by the Team Finland network. Finnvera continued to develop and step up the
Team Finland cooperation, which celebrated its tenth anniversary.
Tighter integration of corporate responsibility and climate action
into financing, risk management and management
Finnvera’s strategy and mission are based on corporate responsibility:
environmental and social sustainability, good governance, financial
responsibility and risk management.
In recent years, corporate responsibility and, in particular, measures to
combat climate change have increased in importance in Finnvera’s strategy.
The strategy defines Finnvera’s position in relation to climate change
mitigation. The aim is to help companies seize the business opportunities
generated by climate change actions. Finnvera’s financing mainly targets new
investments, which typically replace old and more polluting technologies. We
encourage our clients to carry through these projects.
Finnvera started measuring and reporting the climate impacts of its operations.
Finnvera reported for the first time the CO
2
emissions of its own operations and
of the projects it financed in accordance with the Greenhouse Gas Protocol
Scope 1–3. For financing exposure related to energy production, the division
into renewable and fossil fuels was reported. For the second time, Finnvera
calculated the emissions from exposure related to ship financing in line with
the Poseidon Principles climate alignment agreement. While Finnvera’s ship
financing emissions clearly exceeded the international alignment in 2022, over
the long term this figure is expected to reflect better the impacts of Finnvera’s
financing portfolio, as cruise shipping returns to normal and vessels operate
fully. The Poseidon Principles are in line with the target set by the International
Maritime Organization (IMO) of halving the annual greenhouse gas emissions
from shipping by 2050 from their 2008 levels.
Sustainability is also essentially linked to risk management. Our aim is to
safeguard the preconditions for our operation by identifying the risks and
opportunities brought about by climate change in credit risk assessments
and asset management. From the beginning of 2023, environmental
impacts will also be considered in the risk classifications of large financing
projects, in particular.
In 2022, a framework for sustainable financing was approved for Finnvera’s
funding and investments. It meets investors’ sustainability requirements
and needs for information on ESG indicators and, on the other hand, defines
the criteria for sustainable investment as part of Finnvera’s investment plan.
This framework will determine the criteria for sustainable and responsible
investments and systematically allocate capital to investments that meet
these criteria.
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In 2022, Finnvera commissioned an external evaluation from
Sustainalytics, a Morningstar group company, of compliance with the
ESG criteria in Finnvera’s operations from the perspective of investors.
According to the evaluation Finnvera’s ESG risk level is low.
As part of climate change mitigation measures, Finnvera restricts the
financing granted for the most harmful projects. In 2022, we placed
restrictions on granting export credit guarantees for oil and gas projects.
This is consistent with the policies of the E3F (Export Finance for Future)
Coalition. Finland joined the E3F Coalition, which is a declaration signed
by states on discontinuing financing for coal and other fossil fuels,
developing international rules on export financing, and reporting on
climate impacts in 2021. Finnvera’s sectoral policies on coal-fired power
plants had already been updated in 2021. Additionally, Finnvera no longer
finances peat power plant projects abroad.
Decisions on the framework conditions for export financing are made in
international forums. Finnvera actively influences export financing rules
and reporting practices not only within the framework of the E3F but also
through its chairmanship in the OECD Arrangement negotiations, the key
theme of which in 2022 was providing additional incentives for climate-
friendly projects in export financing. Finnvera joined the EU’s Export Credit
Agency (ECA) summit, a cooperative body whose objectives include
agreeing on common CO
2
calculation practices for export financing.
Sustainability goals were crystallised
Finnvera will start developing measures and setting targets for climate
change mitigation for the years to come by means of financing, risk
management and asset management. Measuring the impacts of and
developing Finnvera’s own operations on combating climate change will
also increase in importance.
Corporate responsibility and impact are at the core of Finnvera’s strategy
as the company’s mission is, through its financing, to help its customers
succeed and expand their business while ensuring responsible action
towards the environment and humans. Corporate responsibility concerns
all Finnvera employees, and the attainment of responsibility goals is
promoted through systematic management practices. The company has
set the aim of building up competence related to corporate responsibility
and sustainability throughout the organisation.
The Ministry of Economic Affairs and Employment guides corporate
responsibility at Finnvera through its ownership steering policies.
These principles guiding the company’s operations stress responsibility
in dealings with all stakeholders as well as compliance with laws,
regulations, recommendations issued by different authorities and
international commitments in the company’s operation. The policies on
corporate responsibility at Finnvera are prepared by the Management
Group, the Credit Committee and the Asset Management, and these
policies as well as the goals set for corporate responsibility at Finnvera are
approved by the company’s Board of Directors. The overall responsibility
for achieving the goals rests with the Board of Directors and the Managing
Director. Progress towards the goals in different units is monitored by
Finnvera’s Management Group, which reports to the Board of Directors at
minimum once a quarter. The ownership steering policy ties performance
associated with the responsibility goals to the rewarding of the
Management Group.
Significantly more stringent international obligations concerning corporate
responsibility reporting will be introduced in the next few years. In 2022,
Finnvera investigated the most effective organisational models related
to responsibility and reporting and identified key business areas in terms
of the company’s impact. Reporting on these areas will be developed in
the future. In 2023, Finnvera will establish a cross-administrative group
consisting of persons responsible for different areas led by the Corporate
Responsibility Manager.
Financial performance
Summary of Finnvera Group’s operations in 2022
In recent years, the global and Finnish economies have faced exceptional
crises. While the economy showed a strong recovery from the impacts of
the coronavirus pandemic in 2021, Russia’s invasion of Ukraine in February
2022 changed the situational picture of the global economy and economic
development started declining once more. Hampered by inflation, tighter
monetary policy, the energy crisis and the unstable geopolitical situation and
its indirect impacts, economic growth was slow in 2022. The coronavirus
pandemic also continued to have significant impacts on the global economy.
According to a forecast published by the International Monetary Fund
(IMF) in January 2023, the world economy was estimated to grow by
3.4% globally and by 2.7% in developed countries in 2022. In its Economic
Survey published in December 2022, the Ministry of Finance expected the
GDP in Finland to grow by 1.9%, and in its forecast released in autumn
2022, the Research Institute of the Finnish Economy predicted a GDP
growth of 2.0%. The IMF’s forecasts for the Finnish economy have also
grown more pessimistic since last year.
The Finnvera Group’s result for January–December 2022 was EUR 55 million
(153). Of the result, EUR 75 million was accumulated in October–December.
In January–September, the result showed a loss of EUR 19 million. The
result for 2022 was, in particular, affected by changes in the amounts of loss
provisions for export financing as well as the fact that the State’s credit and
guarantee loss compensation for Finnvera’s domestic financing was reduced
back to the pre-pandemic level from the beginning of 2023.
EUR 150 million of the extensive loss provisions made in the shipping
sector for export credit guarantees and special guarantees in 2020 were
reduced in the last quarter of the year. While cruise shipping companies’
business outlook has improved and the credit risk of Finnvera’s liabilities
is expected to have decreased, significant risks persist. If the recovery of
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this sector slows down and the business of Finnvera’s risk objects face
new difficulties, the loss provisions for export credit guarantee and special
guarantee operations may have to be increased, or final losses may need
to be recognised again. Total exposure relating to Russia decreased from
EUR 977 million to EUR 422 million due to arrangements made in 2022
and repayments, but the credit risk of the exposure is not expected to have
decreased significantly, and the loss provisions of EUR 210 million made
at the beginning of the year were not reversed.
The company made a loss in its domestic financing in 2022, which
reduced the Finnvera Group’s result. This resulted from the State’s credit
and guarantee loss compensation being reduced back to 50% as from
1 January 2023. In the early stages of the coronavirus pandemic, this
compensation was temporarily increased to 80% in 2020. An exception
to this rule after the beginning of 2023 is financing granted on special
industrial policy grounds, in which the loss compensation may be 80% by
decision of the Ministry of Economic Affairs and Employment.
No significant individual final credit losses were realised in 2022. The
Group’s realised credit losses amounted to EUR 39 million (45) in total.
The net interest income and net fee and commission income improved in
January–December compared to the previous year and also compared to
the pre-pandemic years. The net interest income was EUR 13 million higher
than in the previous year, especially as a result of increase in the
market interest rate and investment position. Correspondingly, net fee
and commission income increased by EUR 37 million compared to the
previous year, in particular due to the fee and commission income from
arrangements made and recognition of guarantee premiums received in
advance from early repayments of liabilities.
Changes in the value of items recognised at fair value through profit or
loss were EUR -10 million in the last quarter of the year, whereas this
figure in January–September was EUR 3 million. The negative change in
value towards the end of the year was influenced especially by a negative
change in the fair value of debts, debt securities and interest rate and
currency swaps caused by significant changes in interest rates.
The merger of the subsidiary Veraventure Ltd, which administered venture
capital investments, with the parent company took place on 31 July 2022,
generating a profit of EUR 8 million for the parent company. This sale
finalised Finnvera’s withdrawal from venture capital financing in line with
the Ministry of Economic Affairs and Employment’s policy. At the time of
the merger, Veraventure Ltd had no employees.
Taking into account the result for 2022, Finnvera’s domestic and export
financing reserves for covering potential future losses amounted to a total
of EUR 1,260 million (1,224) at the end of December. The non-restricted
equity for domestic financing was EUR 374 million (399) and the non-
restricted equity for export credit and special guarantee financing as well
as assets in the State Guarantee Fund for covering a loss-making result
totalled EUR 886 million (825). The domestic and export financing
reserves can not subsidise each other.
Financial performance of Finnvera plc and the Group companies
The parent company Finnvera plc turned a profit of EUR 31 million (EUR
111 million) in 2022. Of this amount, the result of the Large Corporates
business accounted for EUR 78 million (73) and SME and Midcap business
for EUR -47 million (34).
Due to the increase in the market interest rates, the net interest income
of the Large Corporates business reached EUR 11 million, whereas in the
previous year it had been slightly negative. The net fee and commission
income stood at EUR 139 million (95) and grew by 46% from the previous
year as a result of an increase in the exposure, restructurings of the
financing and repayments. The change in loss provisions in the Large
Corporates business was EUR 58 million (8). No significant individual final
losses were realised in 2022.
The net interest income of the SME and midcap business was EUR 23
million (25) and the net fee and commission income was EUR 51 million
(52). The amount of realised and expected losses in the outstanding
credits and guarantees and the guarantee portfolio of the SME and midcap
business was EUR 40 million (45). Loss provisions increased by EUR 80
million (1) as the State’s credit and guarantee loss compensation was
reduced to its pre-pandemic level of 50%. The higher rate of the State’s
credit and guarantee loss compensation, which had been increased to 80%
at the beginning of 2020 due to the coronavirus pandemic, remained in
force in 2022, and the loss compensation for realised losses totalled EUR
29 million (35) in the period under review.
The result of Finnvera’s subsidiary, Finnish Export Credit Ltd, was EUR 32
million (43) in 2022. Veraventure Ltd, a subsidiary that managed venture
capital investments, merged with the parent company and no longer
operated in 2022.
Separate result for export credit guarantee
and special guarantee operations
The separate result for export credit guarantee and special guarantee
operations as referred to in the Act on the State Guarantee Fund in 2022
was EUR 56 million (79).
Analysis of financial performance in January–December 2022
Interest income and expenses
The Finnvera Group’s net interest income in January–December came to
EUR 69 million (55). Of this, the net interest income of the export credit
business amounted to EUR 35 million (30), net interest income of the SME
and midcap business to EUR 23 million (25), and net interest income of the
Large Corporates business to EUR 11 million (0). The Group’s net interest
income was 24% higher than in 2021, especially due to the increase in the
market interest rate and investment positions.
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Due to higher market interest rates, the interest income increased to EUR
389 million (222) compared to the previous year. The most significant
factors in the increased interest income were export financing interest
income from lending to customers and interest income from derivatives. At
the end of December, outstanding export credits granted by Finnish Export
Credit Ltd were at a 6% lower level year-on-year, but due to an increased
market interest rate level, the interest income was EUR 70 million higher
than in 2021. On the other hand, outstanding loans in domestic financing
provided by the parent company increased by 5% cent year on year and,
similarly, interest income increased by 7%. Interest income from derivatives
increased by EUR 85 million from the previous year.
The increased market interest rate affected also the interest expenses that
increased to EUR 321 million (167). In 2022, the amount of funds acquired by
Finnvera from the market was EUR 1,000 million (861). The amount of debt
securities in issue at the end of December was EUR 9,663 million (10,285).
Fee and commission income and expenses
The net value of the Group’s fee and commission income, EUR 204 million
(167), increased by 22% from the previous year.
The fee and commission income was EUR 214 million (181), showing a
year-on-year increase of 18%. Fee and commission income from export
credit guarantee and special guarantee operations grew by 34%, which
was due to the early repayments as well as the restructurings and increase
of the exposure. Fee and commission income from domestic financing
guarantees similarly decreased by 3% due to repayments of coronavirus
financing and other large repayments. During the period under review,
Finnish Export Credit Ltd entered 25% less fee and commission income
from contract changes and commitment fees in its outstanding credits
than in 2021.
The share of the parent company’s export credit guarantee and special
guarantee operations in fee and commission income was 70% (62%).
Domestic loans and guarantees accounted for 21% (26%), and export
credits for 9% (12%) of the fee and commission income.
Fee and commission expenses totalled EUR 10 million (15), showing
a year-on-year decrease of 33%. The fee and commission expenses
consisted mainly of the costs of reinsurance taken out by the parent
company. At year end, the maximum indemnity amount of reinsurance
arrangements was EUR 1,446 million (1,209).
Gains and losses from financial instruments carried at fair value
through profit or loss and foreign exchange gains and losses
The Group’s negative changes in the value of items recognised at fair value
through profit or loss and net income from foreign currency operations for
the period under scrutiny totalled EUR -6 million (2), of which the change
in the fair value of liabilities, interest rate and currency swaps as well as
debt securities accounted for EUR -9 million (0). Net income from foreign
currency operations was EUR 3 million (-1).
Finnvera applies hedge accounting in the valuation of liabilities when
hedge accounting is applicable. At the end of the financial year, the
carrying amount of these liabilities was EUR 7,904 million ( 7,897). The
liabilities are hedged from changes caused by market interest rates. Credit
risk changes are not part of the hedging relation.
The fair value option is applied to the valuation of liabilities that fall
outside hedge accounting when they are hedged with derivative contracts.
The valuation of the liabilities is based on market quotes. The share
of the credit risk in the value change of liabilities is presented in other
comprehensive income. At the end of the financial year, the carrying
amount of these liabilities was EUR 1,204 million (2,388).
In addition to derivatives that are used in hedging liabilities, Finnvera has
taken out individual long-term cross currency swaps to cover foreign
currency commitments.
Finnvera additionally applies fair value hedge accounting to some of the
debt securities that are covered with interest rate swaps.
Other operating income
Other operating income was less than EUR 1 million (4) during the period
under review. In the previous year, other operating income included an
operating grant of EUR 4 million received by Finnvera from the State for the
development of domestic financing.
Operating expenses, other operating expenses, and depreciation
and amortisation on tangible and intangible assets
The Group’s operating expenses were EUR 49 million (46), of which
personnel expenses accounted for EUR 30 million (30) and other
operating expenses for EUR 19 million (16). Depreciation and amortisation
amounted to EUR 6 million (8) and other operating expenses to less than
EUR 1 million (0).
The total of operating expenses and depreciation was 3% higher than
in the previous year. This change was impacted by an increase in other
operating expenses, in particular due to increased IT expenses and an
ongoing financial system upgrade project. As a result of a change in
accounting practices used for IT expenses and investments carried
out in the previous year, SaaS service procurements are recognised as
expenses unless the acquisition means gaining control over the object
of the procurement or other assets to be activated. Only expenses
incurred after a procurement decision has been made are activated for
an IT procurement, and the concept of maintenance costs recognised as
expenses has been expanded regarding software in production use.
Realised credit losses and change in expected credit losses
The economic situation, which deteriorated once again as a result of the
coronavirus pandemic and an unstable geopolitical situation, treated
different export sectors in very different ways. Many export sectors
have been successful, but exceptional crises have hit cruise shipping
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extremely hard. While cruise shipping companies’ business outlook has
improved and the credit risk of Finnvera’s liabilities is expected to have
decreased, significant risks persist. If the recovery of this sector slows
down and the business of Finnvera’s risk objects face new difficulties,
the loss provisions for export credit guarantee and special guarantee
operations may have to be increased, or final losses may need to
be recognised again. The company actively monitors any changes
in risk subjects.
The calculation of expected losses is, in particular, influenced by
macroeconomic forecasts and a significant change in credit risk
between the reporting date and the initial granting date. Among others,
factors impacting credit risk include the client’s financial situation,
risk classification, payment behaviour or the financial instrument used
by the client. The amount of expected losses in domestic financing
is also affected by changes in the State’s credit and guarantee loss
compensation. In the early stages of the coronavirus pandemic in 2020,
this compensation was temporarily increased to 80%, and the increase
remained valid in 2022. At the beginning of 2023, the loss compensation
was reduced back to 50%. By decision of the Ministry of Employment and
the Economy, however, a loss compensation rate of 80% is still possible in
financing granted on special industrial policy grounds. The change in the
loss compensation rate increased Finnvera’s liabilities for losses and the
amount of expected losses.
The Group’s realised credit losses and change in expected credit losses
totalled EUR 176 million (46) in 2022. Provisions for credit losses
increased by EUR 137 million (0) and the realised losses were EUR 39
million (45). The coronavirus pandemic and the newly deteriorated cyclical
situation have not significantly affected the amount of realised credit
losses. The State’s loss compensations amounted to EUR 29 million (35),
and after the loss compensations, the Group’s liability for the losses was
EUR 148 million (11).
Expected losses of loans, guarantees and export guarantees increased
by a total of EUR 78 million in 2022. Loss provisions stood at EUR 135
million at the end of December, while the corresponding amount was EUR
57 million at the end of the previous year. The fact that the State’s credit
and guarantee loss compensation was reduced back to 50% from the
beginning of 2023 for financing granted on other than special industrial
policy grounds increased the expected losses.
In 2020, major credit loss provisions totalling EUR 1,222 million had
to be made for export credit guarantee and special credit guarantee
operations. Of the loss provisions made, the share of cruise shipping
sector accounted for approximately 90%. The business outlook of cruise
shipping companies has improved, and the credit risk of Finnvera’s
liabilities is believed to have decreased. Therefore EUR 150 million of the
extensive loss provisions made in 2020 were reduced in the last quarter
of the year. Significant risks persist, however, and if the recovery of this
sector slows down and the business of Finnvera’s risk objects is hit by
new difficulties, the loss provisions for export credit guarantee and special
guarantee operations may have to be increased, or final losses recognised.
Total exposure relating to Russia decreased from EUR 977 million to EUR
422 million due to arrangements made in 2022 and repayments, the credit
risk of the liabilities is not expected to have decreased significantly, and
the loss provisions of EUR 210 million made in the first quarter of the year
were not reversed. The net amount of loss provisions for export credit
guarantee and special guarantee operations increased by EUR 60 million
during the period under review, amounting to EUR 1,355 million at the end
of December (1,295).
Non-performing exposure
Calculated according to the method harmonised at the EU level, the
amount of non-performing exposure in domestic financing stood at EUR
143 million at the end of December (112). When the impairment losses
recognised are considered, non-performing exposure accounted for 5.5%
of total exposure. This was 1.6 percentage points higher than the amount
of non-performing exposure at the end of 2021 (3.9%). The ratio of non-
performing exposure to total exposure was 1.1% (0.8%) when the credit
loss compensation received by the company for domestic financing from
the State is taken into account.
The amount of non-performing exposure in export financing stood at EUR
16 million at the end of December (7). Non-performing exposure accounted
for 0.07% of total exposure. This was 0.04 percentage points greater than
the amount of non-performing exposure at the end of the previous year
(0.03%).
Long-term economic self-sustainability
Finnvera is expected to attain financial self-sustainability in its operations. This
means that the income received from the company’s operations must, over the
long term, cover the company’s operating expenses, taking the State Guarantee
Fund assets into consideration. The period for reviewing self-sustainability is
10 years for domestic financing and 20 years for export financing.
While the company made a loss in its domestic operations in 2022, self-
sustainability was achieved over a ten-year period when calculated
cumulatively until the end of 2022.
As a result of the coronavirus pandemic, significant loss provisions were
made for the export credit guarantee and special guarantee operations
in 2020 in accordance with IFRS 9. Due to these provisions, the result of
export financing showed a considerable loss. Loss provisions for cruise
shipping were reduced in 2022, whereas the loss provisions for exposure
relating to Russia were increased. However, self-sustainability in export
credit guarantee and special guarantee operations was achieved when the
result is calculated cumulatively up till the end of 2022. This calculation
takes into account the assets in the State Guarantee Fund that were
accumulated from the operations of Finnvera’s predecessor organisations.
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The company’s risk-based pricing and the extent and risk level of Finnvera’s
total exposure will have a significant impact on the company’s financial
performance and long-term economic self-sustainability in the years to come.
Balance sheet and contingent liabilities 31 December 2022
At the end of December, the consolidated balance sheet total was EUR 12,635
million (12,220), while the balance sheet total of the parent company, Finnvera
plc, came to EUR 13,660 million (13,242). The Group’s balance sheet total
grew by 3% during the year. At the end of December, the balance sheet total of
Finnish Export Credit Ltd was EUR 7,753 million (8,146).
The Group’s outstanding credits came to EUR 6,893 million (7,306) at the
end of December. The outstanding credits increased by 6% during the
year. The outstanding credits of the parent company, Finnvera plc, came to
EUR 7,977 million (8,401), of which the receivables from the subsidiaries
totalled EUR 7,445 million (7,867). Approximately 39% of Finnish Export
Credit’s outstanding credits were denominated in US dollars, which is
why foreign exchange differences affect the EUR value of the loans. The
value of the US dollar increased by more than 6% in 2022, resulting in an
increase in the EUR value of dollar denominated loans.
The parent company’s outstanding guarantees in domestic financing
decreased by 16% in 2022 due to large repayments and instalments of
the coronavirus pandemic financing. The outstanding guarantees totalled
EUR 1,729 million at the end of December (2,056).
The liabilities calculated pursuant to the Act on the State’s Export Credit
Guarantees (the commitments and one half of the offers given at the
exchange rate of the closing date) were EUR 19,552 million (19,195) at the
end of December. The total exposure arising from export credit guarantees
and special guarantees (commitments and offers given, including
export guarantees) totalled EUR 23,928 million (22,637), of which drawn
guarantees amounted to EUR 14,121 million (12,136). The maximum
indemnity amount of reinsurance arrangements valid at the end of the year
was EUR 1,446 million, or 10% of drawn guarantees.
The Group’s long-term liabilities at the end of December totalled EUR 9,700
million (10,360), of which EUR 9,663 million (10,285) consisted of bonds.
At the end of December, the Group’s non-restricted equity amounted
to EUR 682 million (626), of which the reserve for domestic operations
accounted for EUR 399 million (366), and the reserve for export credit
guarantee and special guarantee operations for EUR 79 million (0).
Retained earnings were EUR 204 million (260) at the end of December.
The accumulated reserves for export credit guarantee and special
guarantee operations were EUR 886 million (825) at the end of 2022, when
the State Guarantee Fund assets of EUR 751 million (747) are taken into
account in addition to the separate result for 2022 of EUR 56 million (79).
The State Guarantee Fund’s assets include recapitalisation of EUR 400
million made by the State in the Fund in 2021. To cover the loss-making
separate result for its export credit guarantee and special guarantee
operations in 2020, Finnvera received a fund payment of EUR 349 million
from the State Guarantee Fund. The fund payment was recorded in the
financial statements as a receivable from the State Guarantee Fund.
The State Guarantee Fund pays this receivable to Finnvera when loss
provisions are realised as compensation.
The separate profit for export credit guarantee and special guarantee
operations can, under the Act on the State Guarantee Fund, be transferred
to the State Guarantee Fund as a fund reimbursement. Finnvera has been
released from the obligation to reimburse the fund payment based on
separate profit made in 2021 and the subsequent years until the reserve
for export credit guarantee and special guarantee operations has reached
its pre-pandemic level of EUR 829 million. The final decision on the release
from the repayment obligation will be taken at the Annual General Meeting.
Finnvera Group 31 Dec 2022 31 Dec 2021 Change Change
Balance sheet, equity MEUR MEUR MEUR %
Share capital 197 197 0 0%
Share premium and
fair value reserve
30 41 -11 -26%
Non-restricted equity, in total 682 626 56 9%
Reserve for domestic
operations
399 366 33 9%
Reserve for export
credit guarantees and
special guarantees
79 0 79 -
Retained earnings 204 260 -56 -21%
Equity attributable to the
parent company’s shareholders
909 863 45 5%
Funding
The Group’s long-term acquisition of funds amounted to EUR 1,000 million
(861), while the short-term funding totalled EUR 1,784 million (0) in 2022.
EUR 1,037 million (750) in long-term loans and EUR 1,232 million (0) in
short-term loans were repaid.
Capital adequacy
The Act on Finnvera (443/1998) stipulates that domestic operations must
be kept separate from export credit guarantee and special guarantee
operations. In consequence, losses from domestic operations are covered
from the reserve for domestic operations, while losses from export credit
guarantees and special guarantees are covered from the reserve for export
credit guarantee and special guarantee operations. Pursuant to the Act on
the State Guarantee Fund (444/1998), the State is responsible for export
credit guarantees and special guarantees. Should the reserve for export
credit guarantee and special guarantee operations lack sufficient assets
to cover the losses incurred in the respective operations, the losses are
covered from assets in the State Guarantee Fund, which are supplemented,
whenever necessary, by an appropriation from the State Budget.
The State Guarantee Fund is an off-budget entity, the funds of which have
been accumulated in the activities of Finnvera’s predecessor organisations.
15
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Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
The above separation prescribed by law and the State’s responsibility
for export credit guarantees explain why Finnvera assesses its capital
adequacy, i.e. the ratio between its exposure and assets, only for domestic
operations and export credit guarantee and special guarantee operations.
According to the goal set by the State of Finland, the owner of Finnvera,
the Group’s capital adequacy ratio for domestic operations should be at
least 15.0%. Finnvera’s capital adequacy is calculated in accordance with
the principles of the Basel III standard method. At the end of December,
the Group’s capital adequacy ratio for domestic operations, Tier 1, stood
at 25.7% (23.9) and the leverage ratio was 23.3% (21.0). The risk-weighted
receivables in the Finnvera Group’s domestic operations totalled EUR 2,400
million at the end of December (2,727) and the capital for calculating
capital adequacy was EUR 618 million (651).
Finnvera Group
Domestic operations 31 Dec 2022 31 Dec 2021 Change Change
Capital for calculating
capital adequacy MEUR MEUR MEUR %
Equity for domestic
operations
625 658 -33 -5%
Intangible assets -8 -7 -1 -10%
Total 618 651 -33 -5%
Finnvera Group
Domestic operations 31 Dec 2022 31 Dec 2021 Change Change
Risk-weighted items MEUR MEUR MEUR %
Receivables from
credit institutions
2 4 -2 -55%
Receivables from clients 1,974 2,318 -344 -15%
Investments and
derivatives
24 23 1 6%
Interest receivables,
other receivables,
prepayments, other assets
13 14 -1 -6%
Binding credit
commitments
177 162 15 9%
Operational risk 210 206 4 2%
Total 2,400 2,727 -326 -12%
No specific requirement has been set for the capital adequacy of
Finnvera’s export financing because, ultimately, the State is responsible for
any major export credit guarantee losses that the equities accumulated
from operations and the assets of the State Guarantee Fund cannot cover.
Consequently, calculating capital adequacy in a manner applied to banking
is not a suitable option for Finnvera, considering its special industrial
policy purpose as a promoter of exports. However, if a similar method for
calculating capital adequacy were applied and the assets in the reserve
for export credit guarantee and special guarantee operations and the State
Guarantee Fund were factored in, the estimated capital adequacy of export
financing in accordance with Tier 1 would be 3.2% (3.4).
Risk position
At the end of 2022, the exposure relating to drawn loans and guarantees
in domestic financing amounted to EUR 2,335 million (2,649), or EUR 314
million less than at the end of 2021. This decrease in exposure was due to
repayments of pandemic financing and other large repayments.
The distribution of the domestic financing credit portfolio met the
targets during the year. After the pandemic years, the situation of Finnish
companies was largely back to normal in 2022, and Russia’s invasion
of Ukraine had no significant direct impacts on the credit risk rate of
the domestic financing. Risks associated with individual customers
increased slightly from the previous year, which added to the number
of non-performing credits at the end of the year. Expected loss (EL) for
outstanding commitments decreased and was 3.04% (3.55) of total
liabilities at the end of the period under review. This decrease in expected
loss was due to repayments of liabilities and changes to the risk model.
Altogether, 89% (84) of Finnvera’s exposure fell into the credit rating
category B or better. Finnvera applies an insolvency definition consistent
with the one used by the EBA. Credit and guarantee losses in domestic
operations amounted to EUR 104 million (52). The increase in losses was
due to a significant increase in the IFRS impairment, which was influenced
by a decrease in the State’s credit and guarantee loss compensation rate
at the beginning of 2023.
At the end of 2022, the export credit guarantee and special guarantee
exposure was EUR 23,383 million (22,637), which is EUR 746 million more
than in the previous year. The greatest share of the outstanding guarantees
totalling EUR 21,485 million (19,500) and binding offers totalling EUR 1,897
million (3,137) were associated with transactions in EU Member States and
OECD countries. The main sectors were cruise shipping, telecommunications
and pulp and paper, which accounted for a total of 82% (81) of the total
liabilities. Altogether, 30% (30) of the liabilities were in risk category BBB-,
which reflects investment grade, or in better risk categories.
While no significant final export credit guarantee losses were realised
in 2022, the calculated expected loss (ECL) remains significantly high.
Originally, the increase in loss provisions was mainly due to a strong
deterioration of the economic outlook resulting from the coronavirus
pandemic and the impairment of shipping companies’ risk ratings.
The exposure related to the export credit financing of Finnvera’s subsidiary,
Finnish Export Credit Ltd., totalled EUR 12,559 million at year end (13,141),
which represents a year-on-year reduction of EUR 581 million. The
exposure includes outstanding credits and binding credit commitments.
Offers amounted to EUR 48 million. The credit risks for export credits
are covered by means of export credit guarantees granted by the parent
company Finnvera plc, which are included in the above-mentioned total
exposure for export financing.
The asset management liquidity portfolio consisting of deposits in banks
and investments in liquid assets stood at EUR 3,931 million (3,836) at the end
of December 2022. All investments were at minimum in risk category BBB-
(Finnvera’s risk category), which reflects investment grade, or in better risk
categories, and all long-term (exceeding 12 months) investments are made
in assets with a minimum credit rating of A (S&P and Fitch) or A3 (Moody’s).
16
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Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
A total of 96% (95%) of assets were in investments or account banks with a
minimum rating of A (Finnvera’s risk category). Expected credit loss (EL) for
deposits and investments was EUR 1.7 million (1.7), or 0.04% (0.04%).
The company hedges interest rate and currency risks using derivatives,
the nominal value of which was EUR 18,259 million (13,771) at the
end of December. The minimum credit rating for all derivative contract
counterparties was A3 (Moody’s) or A (S&P and Fitch). The derivative-
related counterparty risk is mitigated with collateral agreements, the
collateral premiums of which are agreed on a daily basis.
At the end of December, the market risks related to asset management were
in line with the risk limits set by the Board of Directors. Of the most significant
risks, the funding-related cost risk due to structural underfunding was EUR 77
million and the market value risk of the investment portfolio was EUR 77 million.
The balance sheet’s interest rate sensitivity was EUR -18 million for a 200-basis-
point change, and the open foreign exchange position was EUR 14 million.
Corporate governance
Personnel
At the end of the financial period, the Group had 365 employees (369), of
whom 345 (346) held a permanent post and 20 (23) a fixed-term post. The
Group’s average number of employees during the period under review was 368
(366), and the personnel expenses totalled EUR 30 million (30).
Supervisory Board, Board of Directors and auditor
On 25 March 2022, Finnvera’s Annual General Meeting appointed Elina Piispanen,
M.Sc. (Econ.) and Petri Viertiö, M.Sc. (Tech.), new members to Finnvera’s Board
of Directors. Petri Ekman, M.Sc. (Eng.), continued as Chairman of the Board of
Directors. Antti Neimala, Director General, continued as First Vice Chairman of
the Board of Directors and Terhi Järvikare, Director General, continued as Second
Vice Chairman. Hannu Jaatinen, M. Sc. (Econ.), eMBA, and Ritva Laukkanen,
M.Sc. (Econ.), continued as members of the Board of Directors.
Entrepreneur Anne Nurminen was appointed a member of Finnvera’s Board
of Directors on 13 October 2022.
Three committees assist the Board in managing its tasks: the Audit Committee,
the Risk Committee and the Remuneration and nomination Committee.
Katja Syvärinen, Director, the Central Organisation of Finnish Trade
Unions SAK, and Seppo Nevalainen, Economist, the Finnish Confederation
of Professionals STTK, were appointed new members to Finnvera’s
Supervisory Board at the Annual General Meeting on 25 March 2022.
Sofia Vikman, Member of Parliament, continued as Chairman of the
Supervisory Board and Johannes Koskinen, Member of Parliament,
continued as Vice Chairman. Members of Parliament Eeva-Johanna
Eloranta, Mari Holopainen, Anne Kalmari, Juho Kautto, Juha Pylväs, Lulu
Ranne, Wille Rydman and Joakim Strand; as well as Kari Luoto, Managing
Director (Finnish Grocery Trade Association); Veli-Matti Mattila, Director,
Chief Economist (Finance Finland FFI); Anne Niemi, Vice President
(Federation of Finnish Enterprises); Martin Paasi, Chairman (Finnish
Business School Graduates); Arja Parkkinen, Development Manager
(Finnvera); and Tommi Toivola, Director (Confederation of Finnish
Industries) continued as members of the Supervisory Board.
Finnvera’s regular auditor is KPMG Oy Ab, with Marcus Tötterman,
Authorised Public Accountant, as the principal auditor.
Other events during the period under review
Preparations for the transfer of Finnvera’s financial supervision
continued
Preparations for transferring Finnvera’s financial supervision to the
Financial Supervisory Authority continued in 2022. A government proposal
on this matter was submitted to Parliament in December 2022. Finnvera
has prepared for the transfer internally, for example by examining its
internal risk management level processes in relation to valid guidelines
under banking regulation.
Under exceptional circumstances, Finnvera may insure short-term
export transactions to Western industrial countries
The European Commission complemented and extended the special
permission that allows Finnvera to guarantee export transactions with
a risk period of less than two years to Western industrialised countries
(“marketable risk” countries). The new special permission will be valid until
the end of 2025. Within the scope of the special permission, Finnvera may
only insure transactions for which no private credit insurance company
has granted credit insurance.
Finnvera continued to use the EU’s Temporary Framework for State aid
Finnvera continued to use in its financing the European Commission’s
State aid COVID Temporary Framework, which was valid until the end of
June 2022. In addition, the Commission approved a separate State aid
programme in the context of Russia’s invasion of Ukraine for Finnvera
in July 2022. Temporary state aid programmes enable Finnvera to apply
more favourable pricing to its financing in a situation where a company
has suffered financial impacts due to the war in Ukraine or earlier due to
the coronavirus pandemic.
Amount of long-term funding for 2023
Finnvera issued a single EUR 1 billion five-and-a-half year bond in
September 2022. The estimated amount of long-term funding needed for
2023 is EUR 1–2 billion. Due to the coronavirus pandemic and the newly
deteriorated cyclical situation, the need for funding was lower than usual
in 2020–2022.
Attainment of industrial and ownership policy goals
The Ministry of Employment and the Economy sets the industrial and
ownership policy goals for Finnvera. When determining these goals, the
Finnish Government Programme, the ministry’s corporate strategy, the policy
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Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
objectives for the ministry’s branch of administration, and the goals of EU
programmes were taken into consideration. Of the 12 industrial and ownership
policy goals set for 2022, 10 were realised and 2 were partially realised.
Finnvera introduced quarterly reporting
The Finnvera Group publishes its financial statements in Finnish in
compliance with the European Single Electronic Format (ESEF) reporting
requirements. From the beginning of 2022, Finnvera transferred to
publishing its financial reviews on a quarterly basis. In 2023, Interim
Management Statement Q1/2023 will be published on 5 May 2023, Half-
Year Report 1 January–30 June 2023 on 17 August 2023, and Interim
Management Statement Q3/2023 on 09 November 2023.
Events after the period under review
Finnvera launches direct export credit
The Finnvera Group will launch direct export credits to Finnish export
companies’ foreign buyers for transactions worth less than EUR 20 million
without a bank’s involvement. Direct export credits became possible after
Parliament passed an amendment to the Act on Officially Supported
Export and Ship Credits and Interest Equalisation on 13 January 2023. The
President of the Republic approved the Act on 3 February 2023. The aim
of this amendment is to improve the availability of financing for smaller
export projects and to promote the exports and growth of small and
medium-sized enterprises. These export credits will be available once the
legislative amendment enters into force on 10 February 2023.
Compensation paid for deliveries to MV Werften Shipyard
On 6 February 2023, Finnvera paid a total of EUR 100 million guarantee
claim related to the export credit, which was used to pay deliveries made
by Finnish SME exporters to the German shipyard MV Werften. The final
amount of Finnvera’s losses will be determined later. Loss provisions have
already been recorded for the liabilities, and the losses are estimated to no
longer have a result impact.
The State’s credit and guarantee loss compensation was reduced
back to 50%
The State’s credit and guarantee loss compensation was reduced back
to 50% by a government commitment adopted on 8 December 2022. The
new rate entered into force on 1 January 2023. An exception to this rate
is financing granted on special industrial policy grounds, in which the loss
compensation rate may be 80% by decision of the Ministry of Economic
Affairs and Employment.
In the early stages of the coronavirus pandemic, the credit and guarantee
loss compensation was temporarily increased to 80% in 2020. This
increase enabled Finnvera to reduce the price of our domestic financing
in the pandemic situation that was critical for SMEs. The reduction of the
loss compensation to 50% had an impact on the losses made in Finnvera’s
domestic financing in 2022. The new rate makes it necessary for Finnvera
to bring some of the pricing back to the pre-pandemic levels to ensure our
self-sustainability.
Outlook for financing
The uncertain economic outlook may affect the demand for Finnvera’s
financing and, in particular, the financing of SME investments in 2023.
Finnvera will be able to meeting the financing needs of companies
within its financing authorisations. Finnvera has prepared for a need for
flexibilities and instalment-free arrangements arising from the challenges
in the operating environment for companies that have the prerequisites for
profitable business.
Rising energy prices and interest rates will affect both consumers and
companies, especially from the perspective of domestic financing. Banks
have access to a higher number of EU financial instruments than before,
which may reduce demand for domestic financing from Finnvera. Backed
by the InvestEU guarantee programme, Finnvera will introduce a new
climate and environment loan as well as a digitalisation and innovation
loan for companies’ sustainability and business development projects in
the first half of 2023. Through our financing, we encourage companies to
seize the business opportunities created by climate action.
By diversifying the financing offered, we will strengthen further the
support we are providing for the establishment, transfers of ownership,
growth and internationalisation of Finnish companies. In particular,
direct export credits intended to accelerate SMEs’ exports and smaller
export transactions will improve the availability of financing for export
transactions worth less than EUR 20 million.
The overall demand for export credit guarantees and export credits is
expected to remain at previous years’ levels. The overall demand will
be affected by the realisation of individual major projects. It is likely
that the challenges in the operating environment will appear in different
ways in the financing situation of different sectors, and geographically,
the tougher financing situation will probably have a particular impact on
emerging markets. The focus of demand for export financing will probably
be on the forest and telecommunications sectors. The outlook for the
cruise shipping sector and the demand for export financing are strongly
influenced by how the shipping companies recover from the impacts of
the coronavirus pandemic.
While no material individual export credit guarantee losses were realised
in 2022, the Finnvera Group’s credit risk level remains very high due to
the unstable geopolitical situation and uncertain economic outlook. In
particular, cruise shipping and exposure relating to Russia are associated
with uncertainties, causing significant uncertainty to Finnvera Group’s
result development in 2023. The Group’s profit or loss will be determined
by realised credit losses and changes in loss provision amounts.
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Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
Board of Directors’ proposal concerning
the profit for the financial period
The parent company’s profit for the financial period was EUR 31,191,902.30.
The Board of Directors proposes that, by virtue of Section 4 of the Act on the State-Owned Specialised Financing
Company, the result of the financial period be transferred to the non-restricted equity funds as follows:
To the reserve for export credit guarantee and special guarantee operations; the share of export credit guarantee
and special guarantee operations EUR 56,090,208.87
To the reserve for domestic operations; the share of domestic operations EUR -24,898,306.57
The share transferred to the reserve for domestic operations includes profit from merger of EUR 7,681,620.30
arising from the merger of Veraventure Oy, which engaged in venture capital investments, with Finnvera.
In addition, the remeasurement gains in defined benefit pension plans, EUR 245,339.00, were entered directly into
retained earnings during the financial period.
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Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
Key figures
Finnvera Group 2022 2021 2020 2019 2018
Net interest income, MEUR 69 55 51 41 42
Net fee and commission income, MEUR 204 167 143 141 135
Other operating income, MEUR 0 4 349 0 4
- Of which fund payment from The State Guarantee Fund, MEUR - - 349 - -
Operational expenses, MEUR
-49 -46 -44 -42 -46
- Of which salaries including social security costs, MEUR
-30 -30 -29 -29 -28
Realised credit losses and change in expected credit losses, MEUR
-176 -46 -1,269 -60 -45
Credit loss compensation from the State, MEUR 29 35 36 17 24
64 164 -740 100 100
55 153 -748 94 98
Loans to and receivables from customers, MEUR 6,979 7,404 7,088 8,083 6,876
Investments, MEUR 3,165 3,323 3,474 3,231 2,665
Liabilities, MEUR 11,726 11,356 11,946 11,202 9,681
- of which debt securities in issue, MEUR 9,663 10,285 10,379 10,138 8,783
Shareholders’ equity, MEUR 909 863 727 1,463 1,358
- of which non-restricted equity, MEUR 682 626 473 1,221 1,126
Balance sheet total, MEUR 12,635 12,220 12,673 12,665 11,039
Return on equity, ROE, % 6.3 19.2 -68.3 6.7 7.4
Return on assets, ROA, % 0.4 1.2 -5.9 0.8 0.9
Equity ratio, % 7.2 7.1 5.7 11.6 12.3
Capital adequacy ratio, Tier 1, Domestic operations, % 25.7 23.9 25.1 29.4 27.2
Capital adequacy ratio, Tier 1, Export credit guarantee
and special guarantee operations, %
1
3.2 3.4 1.3 6.9 6.8
Expense-income ratio, % 20.7 23.5 26.4 25.4 29.3
Average number of employees 368 366 360 364 372
Loans, guarantees and export credit guarantees offered, Billion EUR 1.3 1.7 1.7 1.0 0.9
Outstanding commitments, Billion EUR 2.6 3.1 2.9 2.3 2.3
1,900 2,400 2,700 2,400 2,600
6,000 8,600 9,100 8,400 7,900
Export credit guarantees and special guarantees offered, Billion EUR 5.7 4.3 2.9 5.2 3.0
Outstanding commitments, Billion EUR 23.7 22.2 22.0 25.2 23.3
24,400 25,800 26,500 24,500 25,700
Formulas for the key indicators
× 100
equity (as the average of the value at the beginning and the end of the period)
× 100
balance sheet total on average (as the average of the value
at the beginning and at the end of the period)
equity + minority share + accumulated appropriations
deducted by the deferred tax liability
× 100
balance sheet total
calculated according to Basel III standard method
operational expenses + depreciation, amortisation and impairment
on tangible and intangible assets + other operating expenses
× 100
net interest income + net fee and commission income + gains and losses
foreign exchange gains and losses + net income from investments + other
operating income excl. fund payment from The State Guarantee Fund
based on monthly average for the whole period
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Financial
Statements
Notes to the
financial statementsAnnual Report 2022
Report of the
Board of Directors
ECL based on the balance sheet items,
domestic financing, incl. export
guarantees 31 Dec 2022, MEUR*
ECL based on the balance sheet items,
export credit guarantees and special
guarantees 31 Dec 2022, MEUR*
7
Realised credit losses and change
in expected credit losses, net
148 MEUR
(2021: 11 MEUR)
Financial
Statements
The financial statements include both the consolidated
and the parent company’s financial statements. The financial
statements are prepared in accordance with the International
Financial Reporting Standards (IFRS). Notes to the financial
statements also comply with the currently valid requirements
of the Finnish Accounting and Limited Liability Companies Acts.
Finnvera Group
Net interest income
69 MEUR
(2021: 55 MEUR)
Net fee and commission income
204 MEUR
(2021: 167 MEUR)
Operational expenses,
depreciation and other
operating expenses
55 MEUR
(2021: 54 MEUR)
XXX
Result for the period, MEUR
6
*Excpected credit losses (ECL) according to IFRS 9 standard.
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Notes to the
financial statements
Report of the
Board of DirectorsAnnual Report 2022
Financial
Statements
Consolidated comprehensive income statement
Finnvera Group Finnvera plc
(EUR 1,000) | Note | 1–12 2022 | 1–12 2021 | 1–12 2022 | 1–12 2021 |
| Interest income | D1 | ||||
| - Interest from loans | |||||
| passed on to customers | |||||
| - Subsidies passed | |||||
| on to customers | |||||
- Other interest income | |||||
Total interest income | |||||
| Interest expense | D1 | - | - | - | - |
Net interest income | |||||
| Net fee and commission income | D2 | ||||
| | D3 | - | - | ||
instruments carried at fair value | |||||
| exchange gains and losses | |||||
| Net income from investments | D4 | ||||
| Other operating income | D5 | ||||
| Total operational expenses | D6 | - | - | - | - |
- Personnel expenses | - | - | - | - | |
- Other operational expenses | - | - | - | - | |
Depreciation and amortisation on tangible and intangible assets | D7 | - | - | - | - |
| Other operating expenses | D8 | - | - | - | - |
| Realised credit losses and change | D9 | - | - | - | - |
| in expected credit losses, net | |||||
- Realised credit losses | - | - | - | - | |
| - Credit loss compensations | |||||
| from the State | |||||
- Expected credit losses | - | - | - | - | |
| |||||
| Income tax | D10 | - | - | ||
|
Finnvera Group Finnvera plc
(EUR 1,000) | Note | 1–12 2022 | 1–12 2021 | 1–12 2022 | 1–12 2021 |
| | |||||
Items that will not be | |||||
| | F5 | ||||
| | |||||
| - Change in credit risk | - | ||||
| associated with liabilities | |||||
| carried at fair value | |||||
| | |||||
| | |||||
| - Change in fair value | - | - | - | - | |
| of investments | |||||
| - Change in expected credit | - | - | - | - | |
| losses of investments | |||||
| - | - | |||
| | - | - | - | - | |
| income | |||||
| | |||||
| | |||||
| | |||||
| | |||||
| | |||||
| | |||||
| | |||||
| | |||||
| |
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Notes to the
financial statements
Report of the
Board of DirectorsAnnual Report 2022
Financial
Statements
Balance sheet
Finnvera Group | Finnvera plc | ||||
(EUR 1,000) | Note | 31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 |
| ASSETS | |||||
| Loans to and receivables from credit institutions | E1 | ||||
- Payable on demand | |||||
- Investment accounts and deposits | |||||
- Other | |||||
| Loans to and receivables from customers | E2 | ||||
- Loans | |||||
- Debt Securities | |||||
- Guarantee receivables | |||||
- Receivables from export credit and special guarantee operations | |||||
| Investments | |||||
| - Debt securities | E3 | ||||
- Investments in group companies | |||||
- Other shares and participations | |||||
| Derivatives | E10 | ||||
| Intangible assets | E4 | ||||
| Tangible assets | E4 | ||||
| Other Assets | E5 | ||||
- Credit loss receivables from the state | |||||
- Other | |||||
| Prepayments and accrued income | E6 | ||||
| Tax assets | E7 | ||||
Assets | |||||
Finnvera Group | Finnvera plc | ||||
(EUR 1,000) | Note | 31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 |
| LIABILITIES | |||||
| Liabilities to other institutions | E8 | ||||
| Debt securities in issue | E9 | ||||
| Derivatives | E10 | ||||
| Provisions | E12 | ||||
| Other liabilities | E11 | ||||
| Accruals and deferred income | E13 | ||||
| Tax liabilities | E7 | ||||
Liabilities | |||||
| EQUITY | E18 | ||||
| Equity attributable to the parent | |||||
| company's shareholders | |||||
Share capital | |||||
Share premium | |||||
Fair value reserve | - | - | - | - | |
| Non-restricted reserves | |||||
- Reserve for domestic operations | |||||
| - Reserve for export credit guarantees | |||||
| and special guarantees | |||||
Retained earnings | |||||
Non-restricted equity | |||||
Total equity, equity attributable to the parent company's shareholders | |||||
| |||||
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Report of the
Board of DirectorsAnnual Report 2022
Financial
Statements
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Statements
Report of the
Board of DirectorsAnnual Report 2022
Notes to the
financial statements
Change in equity
| | ||||||||||
| | | |||||||||
| | | |||||||||
| | | guarantees | | |||||||
| | Fair value | | | | | venture capital | | |||
(EUR 1,000) | | reserve | | | | operations | guarantees | | earnings | |
| 31 Dec 2022 | ||||||||||
| | ||||||||||
| | ||||||||||
Reported equity at 1 Jan | - | - | ||||||||
| | - | - | - | - | - | - | - | - | ||
| period transfer to reserves | ||||||||||
| - | - | - | - | - | - | - | - | - | |
| | - | - | - | - | - | - | - | - | ||
| at fair value through comprehensive income | ||||||||||
Change in credit risk associated with liabilities carried at fair value | - | - | - | - | - | - | - | - | ||
| - | - | - | - | - | - | - | - | ||
| Change in fair value of investments recognised | - | - | - | - | - | - | - | - | - | - |
| at fair value through comprehensive income | ||||||||||
Change in ECL of investments recognised at fair value through comprehensive income | - | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | ||
| - | - | - | |||||||
| 31 Dec 2021 | ||||||||||
| | ||||||||||
| | ||||||||||
Reported equity at 1 Jan | - | - | - | |||||||
| | - | - | - | - | - | - | - | - | ||
| period transfer to reserves | ||||||||||
| - | - | - | - | - | - | - | - | - | |
| | - | - | - | - | - | - | - | - | ||
| at fair value through comprehensive income | ||||||||||
Change in credit risk associated with liabilities carried at fair value | - | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | - | - |
| Change in fair value of investments recognised | - | - | - | - | - | - | - | - | - | - |
| at fair value through comprehensive income | ||||||||||
Change in ECL of investments recognised at fair value through comprehensive income | - | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | ||
| - | - | ||||||||
25
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Financial
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| | ||||||||||
| | | |||||||||
| | | |||||||||
| | | guarantees | | |||||||
| | Fair value | | | | | venture capital | | |||
(EUR 1,000) | | reserve | | | | operations | guarantees | | earnings | |
| 31 Dec 2022 | ||||||||||
| | ||||||||||
| | ||||||||||
Reported equity at 1 Jan | - | - | - | |||||||
| | - | - | - | - | - | - | - | - | ||
| period transfer to reserves | ||||||||||
| - | - | - | - | - | - | - | - | ||
Impact of retained earnings due to sell of subsidiary | - | - | - | - | - | - | - | - | ||
| | - | - | - | - | - | - | - | - | ||
| at fair value through comprehensive income | ||||||||||
Change it the credit risk associated with liabilities carried at fair value | - | - | - | - | - | - | - | - | - | - |
| - | - | ||||||||
| Change in the fair value of investments recognised | - | - | - | - | - | - | - | - | - | - |
| at fair value through comprehensive income | ||||||||||
Change in the ECL of investments recognised at fair value through comprehensive income | - | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | ||
| - | - | - | - | ||||||
| 31 Dec 2021 | ||||||||||
| | ||||||||||
| | ||||||||||
Reported equity at 1 Jan | - | - | - | |||||||
| | - | - | - | - | - | - | - | - | ||
| period transfer to reserves | ||||||||||
| - | - | - | - | - | - | - | - | - | |
| | - | - | - | - | - | - | - | - | ||
| at fair value through comprehensive income | ||||||||||
Change it the credit risk associated with liabilities carried at fair value | - | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | - | - |
| Change in the fair value of investments recognised | - | - | - | - | - | - | - | - | - | - |
| at fair value through comprehensive income | ||||||||||
Change in the ECL of investments recognised at fair value through comprehensive income | - | - | - | - | - | - | - | - | - | - |
| - | - | - | - | - | - | - | - | ||
| - | - | ||||||||
26
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Notes to the
financial statements
Report of the
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Financial
Statements
Statement of cash flows
Finnvera Group | Finnvera plc | ||||
(EUR 1,000) | 31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021 | ||||
| | |||||
Withdrawal of loans granted | - | - | - | - | |
Repayments of loans granted | |||||
Purchase of investments | - | ||||
Proceeds from investments | |||||
Interest received | |||||
Interest paid | - | - | - | - | |
| |||||
| | |||||
| commission income and expense | |||||
Payments received from other operating income | |||||
Payments for operating expenses | - | - | - | - | |
| - | - | - | - | |
Net credit loss compensation from the State | |||||
Net taxes paid | - | - | |||
| |||||
| | |||||
Purchase of property and equipment and intangible assets | - | - | - | - | |
Sale of property and equipment and intangible assets | |||||
Short-term and other liquid investments made | - | - | - | - | |
Proceeds and maturities of short-term and other liquid investments | |||||
Other investments | - | - | |||
Proceeds from other investments | |||||
Dividends received from investments | |||||
| |||||
| | |||||
Proceeds from long-term loans | |||||
Repayment of long-term loans | - | - | - | - | |
| |||||
Payments of lease liabilities | - | - | - | - | |
Repayment of subordinated liabilities and repayable debt to the State | - | - | |||
| - | - | - | - | |
| - | - | - | - | |
| | - | - | |||
| | |||||
| | |||||
| Translation differences | |||||
| | |||||
1 Cash and cash equivalents comprise of cash and investment accounts held in credit institutions. Cash and cash equivalents are included in | |||||
| | |||||
| | |||||
| |
1
1
1, 2
27
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Notes to the
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Financial
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28
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Notes to the
financial statements
Report of the
Board of DirectorsAnnual Report 2022
Financial
Statements
Notes to
the financial
statements
Finnvera Group’s service concepts are based on the client segments
Finnvera Group’s segments are based on the client segmentation and division into business areas that are
the ground for management reporting. Assessment of the profitability of Finnvera’s segments is based on
the operating profit.
Segments
SME and midcap financing
Locally operating
small companies
Clients are locally operating enterprises
that have fewer than 10 employees. This
segment offers financial services for the
start-up and development of enterprises.
Result:
-11 MEUR
(2021: 5)
SMEs focusing on
the domestic markets
Clients are SMEs and, on special
grounds, large corporates.
Result:
-15 MEUR
(2021: 15)
SMEs seeking
growth and
internationalisation
Clients are SMEs and midcaps that
have a growth strategy based on
internationalisation.
Result:
-28 MEUR
(2021: 14)
Export financing
Large corporates
The clients are exporters operating in
Finland, generally classified as large
corporates, as well as domestic and
foreign providers of financing for these.
Result:
78 MEUR
(2021: 73)
Export credits
The segment consists of the operations of
Finnvera’s subsidiary Finnish Export Credit
Ltd, including funding and treasury activities
by the parent company Finnvera plc.
Result:
32 MEUR
(2021: 43)
Return on equity
6.3%
(31 Dec 2021: 19.2%)
Return on assets
0.4%
(31 Dec 2021: 1.2%)
Balance sheet total,
change from previous year
3.4%
(31 Dec 2021: -3.6%)
Notes to the financial statements
A
B
C
D
E
F
G
H
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D Notes to the income statement
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D6 Operational expenses
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D7 Depreciation and amortisation on tangible and intangible assets
56
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E Notes to the balance sheet
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E4 Intangible and tangible assets
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F Notes on personnel and management
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Signatures
Helsinki, 15 February 2023
Petri Ekman Antti Neimala
Chairman of the Board of Directors First Vice Chairman
Terhi Järvikare Hannu Jaatinen
Second Vice Chairman
Ritva Laukkanen Anne Nurminen
Elina Piispanen Petri Viertiö
Pauli Heikkilä
CEO
Auditor’s note
A report on the audit conducted was submitted today.
Helsinki, 15 February 2023
KPMG Oy Ab
Marcus Tötterman
Authorised Public Accountant, APA
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Notes to the
nancial statements
Report of the
Board of DirectorsAnnual Report 2022
Signatures and
Auditor’s report
Auditor’s Report
To the Annual General Meeting of Finnvera plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Finnvera plc (business identity code 1484332-4) for the year ended
31 December 2022. The financial statements comprise both the consolidated and the parent company’s balance
sheet, comprehensive income statement, statement of changes in equity, statement of cash flow and notes,
including a summary of significant accounting policies.
In our opinion the financial statements give a true and fair view of the group’s and the parent company’s
financial position, financial performance and cash flows in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good
auditing practice are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical
requirements that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company
and group companies are in compliance with laws and regulations applicable in Finland regarding these services,
and we have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014.
The non-audit services that we have provided have been disclosed in note D6.3 to the consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Materiality
The scope of our audit was influenced by our application of materiality. The materiality is determined based on
our professional judgement and is used to determine the nature, timing and extent of our audit procedures and
to evaluate the effect of identified misstatements on the financial statements as a whole. The level of materiality
we set is based on our assessment of the magnitude of misstatements that, individually or in aggregate, could
reasonably be expected to have influence on the economic decisions of the users of the financial statements. We
have also taken into account misstatements and/or possible misstatements that in our opinion are material for
qualitative reasons for the users of the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point
(c) of Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of
whether there was evidence of management bias that represented a risk of material misstatement due to fraud.
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
81
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Notes to the
nancial statements
Report of the
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Signatures and
Auditor’s report
The key audit matter
How the matter
was addressed in the audit
Fee and commission income from export credit guarantees and special guarantees and guarantee premiums
paid in advance
(A Accounting principles, note D2 to the income statement and note E13 to the balance sheet)
•
Guarantee fees are recognized over the maturity
of a contract. These fees are charged using
various methods and in different currencies based
on the guarantee contracts.
•
Income from guarantee premiums charged in
advance is recognized over the guarantee period
based on the recognition criteria entered into the
system.
•
Guarantee contracts entered into are client-
specific and may be amended during the contract
period.
•
Due to the significance of income from
export credit and special guarantees (fee and
commission income), reinsurance expenses
(fee and commission expenses) and guarantee
premiums paid in advance, as well as various
bases on which they are determined, the related
internal control and accounting are considered a
key audit matter.
•
We assessed the adequacy and functionality of
application controls in the IT system and other
internal controls in respect of the accounting for
guarantee premiums.
•
We tested on a sample basis unrecognized
guarantee-specific premiums paid in advance.
•
We assessed and tested the control environment.
of the IT system, emphasizing change
management.
•
Furthermore, we considered the appropriateness
of the disclosures in respect of fee and
commission income and guarantee premiums
paid in advance.
Expected credit losses on receivables from customers and on contingent liabilities
(A Accounting principles, B Risk management, Contingent liabilities, note D9 to the income statement and
notes E2 and E12 to the balance sheet)
•
The calculation of expected credit losses
according to the IFRS 9 Financial Instruments
standard involves assumptions, estimates and
management judgment, for example in respect of
the probability and amount of the expected credit
losses as well as determining the significant
increases in credit risk.
•
In particular, the export credit guarantee portfolio
includes significant individual guarantees which
may bear risks and involve loss provisions that are
material for the financial statements.
•
The parameters for the accounting for expected
credit losses are updated and specified based on
macroeconomic forecasts and the development
of realized credit losses, among other things. The
risk rating of clients plays an essential role in the
accounting for ECL.
•
Due to the significance of the carrying amounts
involved, complexity of the accounting
methods used for measurement purposes
and management judgement involved, the ECL
accounting is addressed as a key audit matter.
•
We assessed risk management, monitoring
systems and ECL accounting in respect of
doubtful receivables and guarantees, and tested
related internal controls.
•
Concerning significant individual loss provisions
and recovery receivables we assessed the
appropriateness of the assumptions and methods
used for accounting purposes, the financial
status of the counterparty and coverage of the
company’s reinsurance protection.
•
We assessed the models and the key assumptions
for calculating expected credit losses, as well as
tested the controls over the calculation process
and credit risk models. Our IFRS and financial
instruments specialists were involved in the audit.
•
Finally, we considered the appropriateness of the
disclosures provided in respect of expected credit
losses.
82
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Notes to the
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Report of the
Board of DirectorsAnnual Report 2022
Signatures and
Auditor’s report
Responsibilities of the Board of Directors and the CEO for the Financial Statements
The Board of Directors and the CEO are responsible for the preparation of consolidated financial statements that
give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the
EU and comply with statutory requirements. The Board of Directors and the CEO are also responsible for such
internal control as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the CEO are responsible for assessing the parent
company’s and the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to
going concern and using the going concern basis of accounting. The financial statements are prepared using the
going concern basis of accounting unless there is an intention to liquidate the parent company or the group or
cease operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
parent company’s or the group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
The key audit matter
How the matter
was addressed in the audit
Debt securities, debt securities in issue and derivatives
(A Accounting principles and notes E3, E10, E14–E17 to the balance sheet)
•
At the financial year-end the Group had debt
securities carried at fair value amounting to EUR
2.4 billion.
•
At the financial year-end the Group had debt
securities in issue amounting to EUR 9.7 billion.
Debt securities in issue carried at fair value
through profit or loss totaled EUR 1.2 billion and
debt securities in issue carried at amortized cost
totaled EUR 8.5 billion in the balance sheet as at
31 December 2021.
•
Derivatives are used to hedge the Group’s funding-
related currency and interest rate risks and they
are measured at fair value in preparing financial
statements.
•
The company applies hedge accounting to fixed
interest rate bonds and to related interest rate and
currency swap derivatives when the criteria for
hedge accounting are fulfilled. Concerning certain
liabilities in foreign currencies, cash flow hedge
accounting is applied.
•
Due to the significance of debt securities, debt
securities in issue and derivatives, the related
internal control and accounting are considered a
key audit matter.
•
We evaluated the company’s principles for
treasury operations, monitoring systems for
investments and derivatives, related internal
controls, risk management and valuation
principles applied to financial assets and financial
liabilities.
•
In respect of the hedge accounting we evaluated
the appropriateness of the procedures and
documentation by reference to the applicable
international financial reporting standards.
•
We assessed the classification principles for
financial instruments.
•
As part of our year-end audit procedures we
compared the fair values used in measurement
of debt securities, debt securities in issue and
derivatives to market quotations and other
external price references.
•
In addition, we considered the appropriateness
of the disclosures provided in respect of debt
securities, debt securities in issue and derivatives.
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•
Conclude on the appropriateness of the Board of Directors’ and the CEO’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the parent company or the group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events so that the financial
statements give a true and fair view.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting in 1999, and our appointment represents a
total period of uninterrupted engagement of 24 years.
Other Information
The Board of Directors and the CEO are responsible for the other information. The other information comprises
the report of the Board of Directors and the information included in the Annual Report, but does not include the
financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the
other information.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the
Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has
been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the
financial statements and the report of the Board of Directors has been prepared in accordance with the applicable
laws and regulations.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.
Other Opinions
We support that the financial statements should be adopted. The proposal by the Board of Directors regarding the
use of the profit for the financial year is in compliance with the Limited Liability Companies Act. We support that
the members of the Supervisory Board and of the Board of Directors as well as the CEO of the parent company
should be discharged from liability for the financial period audited by us.
Helsinki, 15 February 2023
KPMG OY AB
Marcus Tötterman
Authorised Public Accountant, KHT
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Independent Auditor’s Reasonable Assurance Report on
Finnvera Plc’s ESEF Financial Statements
To the Board of Directors of Finnvera Plc
We have undertaken a reasonable assurance engagement in respect of whether the consolidated
financial statements for the year ended 31 December, 2022 included in the digital financial statements
743700T69OBBJO7TCA15-2022-12-31-en.zip of Finnvera Plc (Business ID 1484332-4) have been marked up with
iXBRL markups in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors
and financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This
responsibility includes:
•
preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
•
marking up the primary statements and the notes to the consolidated financial statements, and the company
identification data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of
the ESEF RTS; and
•
ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem
necessary to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements applicable in Finland, which
apply to the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding compliance
with ethical requirements, professional standards and applicable legal and regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking up
of the consolidated financial statements included in the ESEF financial statements comply in all material respects
with the Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in accordance with
International Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
•
the primary statements of the consolidated financial statements included in the ESEF financial statements are,
in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
•
whether the notes to the consolidated financial statements and the company identification data included in the
ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
•
whether the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the assessment
of the risks of material departures from the requirements set out in the ESEF RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of Finnvera
Plc identified as 743700T69OBBJO7TCA15-2022-12-31-en.zip for the year ended 31 December, 2022 are, in all
material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Finnvera Plc for the year ended 31
December, 2022 is set out in our Auditor’s Report dated 15 February, 2023. In this report, we do not express any
audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 15 February, 2023
KPMG OY AB
Marcus Tötterman
Authorised Public Accountant, KHT
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Statement by the Supervisory Board
We have reviewed the financial statements of Finnvera plc, including the consolidated financial statements, for
the period 1 January–31 December 2022, as well as the auditors’ report issued on 15 February 2023.
We propose to the Annual General Meeting that the financial statements, in which the consolidated income
statement shows a profit of EUR 55 489 079,83 and the parent company’s income statement shows a profit of
EUR 31 191 902,30, be adopted and that the parent company’s profit be used in accordance with the proposal
made by the Board of Directors.
Helsinki, 15 February 2023
Sofia Vikman Johannes Koskinen
Eeva-Johanna Eloranta Mari Holopainen
Anne Kalmari Juho Kautto
Kari Luoto Veli-Matti Mattila
Seppo Nevalainen Anne Niemi
Martin Paasi Arja Parkkinen
Juha Pylväs Lulu Ranne
Wille Rydman Joakim Strand
Katja Syvärinen Tommi Toivola
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