Bonum Bank Plc

BOARD OF DIRECTORS’

REPORT AND FINANCIAL

STATEMENTS

1 January - 31 December 2024

CONTENTS

BOARD OF DIRECTORS’ REPORT 1 JANUARY  31 DECEMBER 2024 ............................................................................ 4

POP Bank Group and amalgamation of POP Banks ......................................................................................................................... 4

Operating environment ...........................................................................................................................................................................................................6

Financial position ............................................................................................................................................................................................................................ 7

Credit rating ...................................................................................................................................................................................................................................... 10

Shareholdings and equity .................................................................................................................................................................................................10

Risk and capital adequacy management and risk position ...................................................................................................11

Internal control ................................................................................................................................................................................................................................15

Internal audit .....................................................................................................................................................................................................................................15

Bonum Bank’s management and personnel ...............................................................................................................................................15

Audit .............................................................................................................................................................................................................................................................16

Corporate governance ..........................................................................................................................................................................................................16

Remuneration ...................................................................................................................................................................................................................................16

Key outsourced operations ...........................................................................................................................................................................................17

Deposit guarantee .................................................................................................................................................................................................................... 18

Social responsibility ................................................................................................................................................................................................................ 18

Events after the closing date ...................................................................................................................................................................................... 18

Outlook for 2025 .......................................................................................................................................................................................................................... 18

Board of directors’ proposal on the disposal of the result for the period ............................................................ 18

BOARD OF DIRECTORS’ AND FINANCIAL STATEMENTS REPORT 31.12.2024 IFRS ................................19

Income statement ......................................................................................................................................................................................................................19

Statement of other comprehensive income .............................................................................................................................................20

Balance sheet ..................................................................................................................................................................................................................................21

Statement of changes in the equity capital ..............................................................................................................................................22

Cash ﬂow statement ............................................................................................................................................................................................................. 23

NOTES ..... ........................................................................................................................................................................................................................................................... 25

Note 1 Accounting policies ............................................................................................................................................................................................ 25

Note 2 Risk management ................................................................................................................................................................................................. 36

Note 3 Interest income and expenses ..............................................................................................................................................................49

Note 4 Net commissions and fees ...................................................................................................................................................................... 50

Note 5 Net investment income ................................................................................................................................................................................ 50

Note 6 Other operating income ................................................................................................................................................................................51

Note 7 Personnel expenses .............................................................................................................................................................................................51

Note 8 Other operating expenses ......................................................................................................................................................................... 52

Note 9 Depreciation, amortisation and impairment ....................................................................................................................... 52

Note 10 Income tax ................................................................................................................................................................................................................. 53

Note 11 Net income and expenses of ﬁnancial assets and

ﬁnancial liabilities by measurement category ....................................................................................................................................... 54

Note 12 Classiﬁcation of ﬁnancial assets and ﬁnancial liabilities ............................................................................... 55

Note 13 Classiﬁcation of ﬁnancial assets and ﬁnancial liabilities

and fair values by valuation technique ............................................................................................................................................................57

Note 14 Impairment losses on ﬁnancial assets ....................................................................................................................................63

Note 15 Liquid assets ............................................................................................................................................................................................................68

Note 16 Loans and advances .....................................................................................................................................................................................68

Note 17 Investments assets .........................................................................................................................................................................................69

Note 18 Intangible assets ................................................................................................................................................................................................ 70

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 2

Note 19 Property, plant and equipment .......................................................................................................................................................... 71

Note 20 Other assets ............................................................................................................................................................................................................72

Note 21 Deferred taxes ........................................................................................................................................................................................................72

Note 22 Liabilities to credit institutions and customers ............................................................................................................75

Note 23 Derivative contracts and hedge accounting ...................................................................................................................76

Note 24 Debt securities issued to the public ...........................................................................................................................................79

Note 25 Provisions and other liablities ........................................................................................................................................................... 80

Note 26 Equity capital ........................................................................................................................................................................................................ 80

Note 27 Collaterals given and received .........................................................................................................................................................82

Note 28 Off-balance-sheet commitments ...............................................................................................................................................82

Note 29 Leasing ...........................................................................................................................................................................................................................83

Note 30 Related party disclosures ......................................................................................................................................................................85

Note 31 Events after the closing date .............................................................................................................................................................86

SIGNATURES ............................................................................................................................................................................................................................................... 87

AUDITOR’S REPORT ..........................................................................................................................................................................................................................89

INDEPENDENT AUDITOR’S REPORT ON THE ESEF FINANCIAL

STATEMENTS OF BONUM BANK PLC .....................................................................................................................................................................94

This document is a translation of the original Finnish version “Bonum Pankki Oyj:n toimintakertomus ja

tilinpäätös 1.1-31.12.2024”. In case of discrepancies, the Finnish version shall prevail.

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 3

BOARD OF DIRECTORS REPORT

1 JANUARY – 31 DECEMBER 2024

Bonum Bank Plc (hereinafter “Bonum Bank”) is part

of the amalgamation of POP Banks and is respon-

sible for providing 18 POP Banks with central credit

institution services, obtaining external funding for

the POP Bank Group, handling payments, issuing

payment cards to the customers of the POP Banks

and providing centralised services for the Group.

In addition, Bonum Bank grants unsecured con-

sumer credits and secured lending to retail cus-

tomers. The purpose of Bonum Bank’s internal ser-

vice production is to limit the Group’s dependence

on external service providers and enhance the ef-

ﬁciency of the whole Group’s cost structure. In its

external business operations, Bonum Bank pro-

vides services that are in line with the Group’s

strategy and supplement its offering.

Bonum Bank operates as the central credit insti-

tution for the banks of the amalgamation, arrang-

ing funding from the capital markets for the mem-

ber banks. In April, Bonum Bank issued a ﬁve-year

directed bond of EUR 50 million within its EUR 750

million bond programme and in November repaid

EUR 30 million bond. Bonum Bank also acquired

funding by issuing short-term certiﬁcates of de-

posit under its EUR 250 million certiﬁcates of de-

posit programme and by accepting money market

deposits. During 2024, Bonum Bank centrally man-

ages derivatives used for interest rate hedging for

the POP Bank amalgamation. Bank is responsible

for managing of the liquidity puffer (LCR portfolio)

of the amalgamation.

Bonum Bank’s Annual General Meeting was held in

April 2024. The Annual General Meeting dealt with

statutory matters, decided to pay EUR 1,000 thou

sand divided, and elected Jaakko Pulli, Hanna Lin-

na, Kirsi Salo and Ilkka Lähteenmäki to the Board

of Directors. Jaakko Pulli has served as Chair of

the Board.

The result of the reviewing period vas EUR 784

(2,406) thousand. At the end of the period Bonum

Bank’s balance was EUR 2,050,510 (1,1837,618)

thousand.

POP BANK GROUP AND

AMALGAMATION OF POP BANKS

The POP Bank Group is a Finnish ﬁnancial group

that offers retail banking services for private cus-

tomers and small and medium-sized enterprises.

The POP Banks are cooperative banks owned by

their member customers. The POP Banks’ mission

is to promote their customers’ ﬁnancial well-being

and prosperity, as well as local success.

In its business operations, POP Bank Group uti-

lises intangible assets, which are mainly licens-

es and information systems. In addition to intan-

gible assets, the intangible resources relevant to

POP Bank Group’s business operations consist of

the POP Pankki (POP Bank) brand, business mod-

el and good reputation, as well as skilled and pro-

fessional personnel. These, combined with strate-

gic partnerships, lay the foundation for success-

ful business operations and are a key part of POP

Bank Group’s long-term growth strategy.

STRUCTURE OF THE POP BANK GROUP

The POP Bank Group consists of the POP Banks,

POP Bank Centre coop and their controlled enti-

ties. The POP Banks are member credit institutions

of POP Bank Centre coop. POP Bank Centre coop

and its member credit institutions are mutually li-

able for their debts and liabilities in line with the

Act on the Amalgamation of Deposit Banks. The

POP Banks, POP Bank Centre coop and their con-

trolled service companies constitute the Amalga-

mation of POP Banks.

POP Bank Centre coop is the central institution of

the Amalgamation of POP Banks and is respon-

sible for steering and supervising the POP Bank

Group. POP Bank Centre coop has two subsidiar-

ies, Bonum Bank Plc and POP Mortgage Bank Plc,

which are also its member credit institutions.

Bonum Bank Plc serves as the central credit in-

stitution of the POP Banks and acquires external

funding for the Group by issuing unsecured bonds.

Bonum Bank Plc is also responsible for the POP

Banks’ card business and the Group’s payment

transactions and centralised services, in addition

to granting credit to retail customers. POP Mort-

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 4

gage Bank Plc is responsible for the Group’s mort-

gage-backed funding, which it acquires by issuing

covered bonds.

POP Bank Group also includes POP Holding Ltd

owned by POP Banks and POP Bank Centre coop.

POP Holding Ltd owns 30 per cent of Finnish P&C

Insurance Ltd that belongs to LocalTapiola Group

and uses the auxiliary business name of POP Insur-

ance. POP Holding Ltd is not a member of the amal-

gamation of POP Banks and is not included in the

scope of joint liability.

The following ﬁgure shows the structure of the POP

Bank Group and the entities included in the amal-

gamation and covered by joint mutual responsibility.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 5

OPERATING ENVIRONMENT

Global economic growth was moderate in 2024.

Growth was stronger in Asia, but in the Unit-

ed States and the euro area, which are important

markets for Finnish exports, economic growth re-

mained slower. The ECB (European Central Bank)

and the FED (US Federal Reserve) have sought

to slow down the high inﬂation rates of recent

years, and therefore both maintained a tight mon-

etary policy in the ﬁrst half of 2024, keeping in-

terest rates high. As inﬂationary pressures grad-

ually eased, the ECB started to gradually lower its

key interest rates in June to support the econo-

my, which was slowing down. The FED started to

reduce interest rates in September.

Although the euro area economy grew in 2024, the

emergence of political and economic problems

in the major euro area economies, Germany and

France in particular, dampened growth prospects.

In addition, in the euro area, the US election result

in November increased fears of a trade war and

concerns about continued US support for Ukraine,

and raised expectations of increased cost pres-

sures for European NATO members.

The Finnish economy continued to perform slug-

gishly, with GDP growth remaining negative in

2024. This was partly because of industrial ac-

tion in the early part of the year, as well as re-

duced household consumption. The sharp decline

in construction and growth in unemployment al-

so slowed the economy’s recovery from the reces-

sion. There was a record number of bankruptcies in

2024, especially in construction and related sec-

tors. The number of bankruptcies in the restaurant

sector was also exceptionally high. Finnish exports

were modest in the early part of the year, but

started to grow in the second half. As a result of

the weak outlook and demand, corporate invest-

ment fell markedly from 2023. On the positive side

for the Finnish economy, inﬂation rates returned to

normal and interest rates started to fall consider-

ably.

During 2024, wage and salary earners’ purchasing

power increased, and the household debt ratio was

declining. Falling interest rates towards the end of

the year and a slowdown in the downward trend

in housing prices boosted housing sales. Howev-

er, the majority of households remained cautious

about spending and major purchases.

Households’ caution was also reﬂected in the

growth of bank deposits in Finland. In particular,

the popularity of higher-interest ﬁxed-term de-

posits increased. The amount of assets invested

in Finnish investment funds increased signiﬁcant-

ly as well. The average price performance of Finn-

ish stocks was weak during 2024, with the gen-

eral index down by 6.8 per cent from the end of

2023, while the US stock market in particular rose

strongly, driven by technology companies.

Although wage and salary earners’ overall pur-

chasing power developed favourably in 2024, a

signiﬁcant proportion of households continued to

suffer from rising costs as a result of the excep-

tionally high inﬂation of previous years.

In agriculture, one of the main cost components

is the level of input prices, which stabilised from

the price spikes of previous years. However, pro-

ducer prices have fallen more than input prices,

so entrepreneurial income in agriculture has not

increased. The differences in proﬁtability perfor-

mance between farms became even more polar-

ised. For forest owners, a positive development

was the continued growth in the industrial demand

for wood. Both the volume and the average prices

in the timber trade increased markedly on the pre-

vious year.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 6

FINANCIAL POSITION

PERFORMANCE

Bonum Bank’s proﬁt for the ﬁnancial year was EUR 784 thousand, whereas last year that was EUR 2,406

thousand. The proﬁt for the ﬁnancial year primarily consists of interest and commission income on cen-

tral credit institution services provided for POP Banks, income from unsecured lending and proﬁt on the

card business and payments. The Bank’s cost-to-income ratio was 84.2 per cent (74.3).

The bank’s key income statement items have developed as follows, compared with year 2023:

Operating income totalled EUR 25,275 (24,623)

thousand. The year 2024 income level remained the

same compared to previous year. This represents

an increase of 2.6 per cent year-on-year. The de-

creased level of the net interest income was mainly

due to growth of interest expenses in central credit

institution services.

Net commission income increased 11 % from pre-

vious year to EUR 8,024 (7,226) thousand. Commis-

sion income consists mostly of income from the

cards business and payment transmission fees.

Net investment income increased to EUR 566

(-769) thousand. Net investment income consists

of mainly net gains from foreign currency transac-

tions and net income from derivatives. Other op-

erating income totalled to EUR 6,451 (5,167) thou-

sand. The increase in other operating income is due

to the growth of the Group’s internal services.

Operating expenses totalled at EUR 21,279 (18,302)

thousand. Personnel expenses, that are composed

of salary expenses and pension and other indi-

rect employee expenses, increased to EUR 6,864

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Interest income 74,491 65,195

Interest expenses -64,257 -52,196

Net interest income 10,233 12,999

Net commissions and fees 8,024 7,226

Net investment income 566 -769

Other operating income 6,451 5,167

Total operating income 25,275 24,623

Personnel expenses -6,864 -5,409

Other operating expenses -13,943 -11,982

Depreciation and amortisation -473 -911

Total operating expenses -21,279 -18,302

Impairment losses on ﬁnancial assets -3,018 -3,306

Proﬁt before taxes 978 3,015

Income tax expense -194 -609

Proﬁt for the period 784 2,406

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 7

(5,409) thousand. The increase in operating ex-

penses comes mainly from one-off expenses relat-

ed to selling consumer lending receivables. On 31

December 2024, the Bank had 102 (88) employees.

Depreciations and impairment losses on tangible

and intangible assets were EUR 473 (911) thou-

sand.

Impairment losses on ﬁnancial assets increased to

EUR 3,018 (3,306) during the year. Active collection

measures are being targeted at receivables recog-

nised as credit losses.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 8

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Assets

Liquid assets 558,332 485,020

Loans and advances to credit institutions 1,020,697 849,549

Loans and advances to customers 197,579 193,373

Derivatives 22,395 9,220

Investment assets 218,689 259,963

Intangible assets 108 329

Property, plant and equipment 370 648

Other assets 31,992 39,309

Tax assets 347 207

Total assets 2,050,510 1,837,618

Liabilities

Liabilities to credit institutions 1,759,867 1,424,772

Liabilities to customers 14,060 33,435

Derivatives 8,674 1,798

Debt securities issued to the public 184,706 283,896

Other liabilities 31,938 42,970

Tax liabilities 257 203

Total liabilities 1,999,503 1,787,075

Equity capital

Share capital 10,000 10,000

Reserves 30,657 30,001

Retained earnings 10,350 10,543

Total equity capital 51,007 50,543

Total liabilities and equity capital 2,050,510 1,837,618

BALANCE SHEET

At the end of the year 2024, Bonum Bank’s balance

sheet stood at EUR 2,050,510 (1,837,618) thousand.

The amount of liquid assets grew during the review

period to EUR 558,332 (485,020) thousand. Loans

and receivables from credit institutions were EUR

1,020,697 (849,549) thousand. This item includes

the funding provided by Bonum Bank to other

member banks of the POP Bank Group. Loans and

receivables from customers totalled to EUR 197,579

(193,373) thousand. This item includes the cred-

it used on credit cards issued by Bonum Bank and

other loan products issued by Bonum Bank to its

customers.

Liabilities to credit institutions increased up to

EUR 1,759,867 (1,424,772) thousand. This item in-

cludes deposits from the other member banks of

the POP Bank Group, and deposits from the oth-

er banks outside the Group. The amount of debt

securities issued to the public was EUR 184,706

(283,896) thousand at the end of the review period.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 9

CREDIT RATING

In December, 2024 S&P Global Ratings afﬁrmed

Bonum Bank Plc’s issuer credit rating ‘BBB’ for

long-term and ‘A-2’ for short-term. At the same

time the agency afﬁrmed Bonum Bank’s ‘BB-

B+/A-2’ resolution counterparty ratings (RCRs).

SHAREHOLDINGS AND EQUITY

On 31 December 2024, Bonum Bank had 1,400,000

shares, all of them held by the POP Bank Centre

coop. Bonum Bank holds no own shares.

At the end of the ﬁnancial year, Bonum Bank’s share

capital was EUR 10,000 thousand (10,000). Equity

totalled EUR 51,007 (50,543) thousand.

KEY FIGURES AND THE FORMULAS OF KEY FIGURES

31 Dec 2024 31 Dec 2023 31 Dec 2022 31 Dec 2021 31 Dec 2020

Cost-to-income-ratio, % 84.2 74.3 74.2 75.4 71.4

ROA, % 0.04 0.14 0.26 0.10 0.09

ROE, % 1.54 4.95 8.25 3.00 2.13

Common equity Tier 1

capital ratio (CET1)

20.3 19.4 20.0 21.8 24.1

Capital adequacy ratio

(TC) %

20.3 19.4 20.0 21.8 24.1

Equity ratio, % 2.5 2.8 3.0 3.4 3.4

COSTTOINCOME RATIO, % =

Total operating expenses

Total operating income

RETURN ON ASSETS ROA, % =

Result for the period

Balance sheet total (average of beginning and end of year)

RETURN ON EQUITY ROE, % =

Result for the period

Equity (average of beginning and end of year)

CAPITAL ADEQUACY RATIO TC, % =

Total capital (TC)

Total minimum capital requirement

EQUITY RATIO, % =

Equity

Balance sheet total

x 100

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 10

RISK AND CAPITAL ADEQUACY

MANAGEMENT AND RISK

POSITION

PRINCIPLES AND ORGANISATION OF RISK

AND CAPITAL MANAGEMENT

The POP Bank Group’s strategy outlines the Group’s

risk appetite. Business activities are carried out at

a moderate risk level so that the risks can be man-

aged in full. The purpose of Bonum Bank’s risk man-

agement is to ensure that all risks are identiﬁed,

measured and monitored and that they are propor-

tionate to Bonum Bank’s and the amalgamation’s

risk-bearing capacity and capital adequacy posi-

tion. Risk management processes must be able to

identify all signiﬁcant risks of the business opera-

tions and assess, measure and monitor these reg-

ularly. The most signiﬁcant risks associated with

Bonum Bank’s operations are credit risk, liquidity

risk and interest rate risk.

As the central institution, POP Bank Centre coop

supervises the sufﬁciency and functioning of the

risk management systems at the level of the mem-

ber credit institutions and the amalgamation and

is liable for the Group’s risk and capital adequacy

management in accordance with section 17 of the

Amalgamation Act. The central institution of the

amalgamation issues binding instructions concern-

ing risk and capital adequacy management, corpo-

rate governance and internal control to the mem-

ber credit institutions to secure their solvency and

capital adequacy. Furthermore, common business

controlling thresholds have been established for

the member institutions to ensure that the risks

taken by an individual member institution are within

acceptable limits.

Bonum Bank is the central credit institution and a

member credit institution of the amalgamation of

POP Banks. Bonum Bank’s risk management’s goal

is to ensure that the bank complies with laws, de

crees, instructions and regulations issued by the

authorities, their own rules and the internal binding

guidelines issued by the central institution of the

amalgamation in its activities. In addition to central

institution’s independent functions, Bonum Bank

has own separate risk control unit to monitor risk

position and a compliance contact person.

The purpose of capital adequacy management is to

ensure the sufﬁcient amount, type and efﬁcient use

of the capital of the Bonum Bank. A sufﬁcient lev-

el of capital covers the material risks arising from

implementation of the bank’s business plan in ac-

cordance with its strategy, and also secures the

uninterrupted operation of the bank in the case

of unexpected losses. The goal is pursued through

a documented and systematic capital adequacy

management process that is integrally linked to the

strategy process, business planning and manage-

ment at the level of the amalgamation.

The amalgamation’s risk management and capi-

tal adequacy management are described in more

detail in Note 4 to the POP Bank Group’s ﬁnan-

cial statements. Furthermore, information concern-

ing risks speciﬁed in the EU Capital Requirements

Regulation (EU 2019/876) is presented in a sepa-

rate Pillar III report. Copies of the ﬁnancial state-

ments of the POP Bank Group are available online

at www.poppankki.ﬁ or from the ofﬁce of the POP

Bank Centre coop, address Hevosenkenkä 3, 02600

Espoo, Finland.

BUSINESS RISKS

CREDIT RISKS

Bonum Bank’s credit risk exposure decreased

during the ﬁnancial period. Balance sheet items

exposed to credit risk totalled EUR 418,712

(460,508) thousand at the end of 2024. Bonum

Bank’s off-balance sheet credit commitments to-

talled EUR 185,172 (171,533) thousand, consist-

ing mainly of unrestricted credit facilities related

to card credit and the POP Banks’ liquidity facil-

ities. Bonum Bank’s most signiﬁcant credit risks

are related to investment activities and unsecured

credits.

At the end of the ﬁnancial period, Bonum Bank’s

investment assets totalled EUR 218,689 (259,963)

thousand. The investment asset items in the li-

quidity reserve include debt securities issued by

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 11

governments, municipalities, credit institutions

and companies. Some of these debt securities are

accepted as collateral by the ECB. The credit risk

related to investment activities is managed main-

ly by limiting the creditworthiness of investments

and distributing investment assets across sectors,

counterparties and instrument classes.

The retail banking segment’s loan portfolio in-

creased by 2.2 per cent during the ﬁnancial peri-

od, amounting to EUR 197,579 (193,373) thousand.

Most of the lending was unsecured lending, which

represented 59.5 per cent of the loan portfolio.

Loans granted to private customers represented

86.5 (86.3) per cent of the loan portfolio.

Expected credit losses (ECL) on loans, receivables

and off-balance sheet items increased by EUR

914 thousand during the ﬁnancial period, amount-

ing to EUR 8,008 thousand. Expected credit loss-

es in IFRS stage 3 increased to EUR 6,071 (4,954)

thousand. In 2024 write offs were in total EUR

2,103 (1,111) thousand. Write offs are under active

collection procedures. ECL bookings and write-

offs increased due to increase in the total loan

portfolio, but the increase was also affected by

the worsened economic situation.

Credit risk monitoring in banking operations is

based on the continuous monitoring of non-per-

forming receivables, payment delays and for-

bearance, and on monitoring the quality of the

loan portfolio. Monitoring the amount of expected

credit losses is an important part of the credit risk

management process. Foreseeable credit man-

agement problems are addressed as early as pos-

sible.

LIQUIDITY RISKS

Bonum Bank as the central credit institution is re-

sponsible for fulﬁlling liquidity coverage require-

ments and liquidity risk management at the POP

Bank Group level. Liquidity risks are prepared for by

maintaining a sufﬁcient liquidity reserve compris-

ing of LCR eligible high-quality liquid assets, assets

eligible as central bank collateral, and short-term

bank receivables.

The POP Bank Group’s liquidity position remained

strong during the ﬁnancial period. The liquidity re-

quirement (Liquidity Coverage Ratio, LCR) for the

amalgamation of POP Banks was 315.1 (273.9) per

cent on 31 December 2024, with the minimum level

being 100 per cent. At the end of the ﬁnancial pe-

riod, Bonum Bank had EUR 955.0 (887.2) million in

LCR-eligible liquid assets before haircuts, of which

59.5 (55.9) per cent consisted of cash and receiva-

bles from the central bank and 37.8 (41.3) per cent

consisted of highly liquid Tier 1 securities. In addi-

tion, the member credit institutions of the amal-

gamation had EUR 154.1 (98.4) million in unpledged

securities outside the LCR portfolio.

The requirement for stable funding, NSFR, meas-

ures the maturity mismatch of assets and liabilities

on the balance sheet and aims to ensures that the

level of stable funding is sufﬁcient to meet fund-

ing needs over a one-year period, thus preventing

over-reliance on short-term wholesale funding. The

consortium’s NSFR ratio on 31 December 2024 was

136.9 (132.7) per cent.

Bonum Bank provides the member banks of the

amalgamation with access to long-term wholesale

funding, in addition to serving as an internal bank

for member credit institutions. The planning of the

bank’s funding structure is based on liquidity and

funding planning of the whole amalgamation as well

as the strategic goals and limits set by the central

institution.

At the end of the year, Bonum Bank had EUR 170

(255) million outstanding in an unsecured senior

loan issued as part of its EUR 750 million bond pro-

gramme. Of the bank’s EUR 250 million certiﬁcate

of deposit programme, EUR 15 (29) million was out-

standing at the end of the review period.

MARKET RISKS

The most signiﬁcant market risk related to Bonum

Bank’s business operations is the interest rate

risk associated with the banking book. The inter-

est rate risk refers to the impact of changes in in-

terest levels on the market value of balance sheet

and off-balance-sheet items, or on net interest

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 12

income. Banking book consists of loans and de-

posits, wholesale funding and liquidity portfolio in-

vestments.

Bonum Bank’s business operations do not include

trading activities. On amalgamation level, any use

of derivatives is limited to hedging interest rate

risk in the banking book items. The Bank continued

execution of derivative hedges during the ﬁnancial

year to decrease banking book interest rate risk in

member banks balance sheet.

Bonum Bank monitors the interest rate risk us-

ing the present value method and the dynamic

income risk model on monthly basis. The present

value method measures how changes in interest

rates affect the constructed market value of the

balance sheet. In the present value method, the

market value of the balance sheet is calculated

as the present value of the expected cash ﬂows of

individual balance sheet items. Interest rate sen-

sitivity indicators are used to monitor the market

value changes caused by changes in the interest

rates and credit spreads of investment items in

different interest rate scenarios. The income risk

model predicts future net interest income and its

changes in various market rate scenarios within a

time frame of ﬁve years.

OPERATIONAL RISKS

The objective of the management of operation-

al risks is to identify essential operational risks

in business operations and minimise their mate-

rialisation and impact. The objective is pursued

through operational risk management processes,

internal guidelines, process controls, continuous

personnel training and internal control measures.

The most important operational risk management

processes are operative risk self-assessment pro-

cess, continuous evaluation of realized operative

incidents and near-miss events and new product

/service approval procedure. All these incorpo-

rate recognition and evaluation of essential risks

in business processes and planning of procedures

to mitigate the risk.

CAPITAL ADEQUACY

Bonum Bank’s capital adequacy was at a good

level at the end of 2024. Both capital adequacy

ratio and core capital adequacy ratio were 20.3

(19.4) per cent. At the end of 2024, the bank’s own

funds totalled EUR 49,582 (47,515) thousand, con-

sisting entirely of CET1 capital.

Bonum Bank’s risk weighted assets 2024 were at

the same level as 2023. The growth in the retail

credit portfolio is expected to continue in 2025,

which will increase the amount of its risk weighted

receivables accordingly.

Bonum Bank’s own funds consist of share cap-

ital, retained earnings and other non-restrict-

ed reserves. In line with the practice followed by

the amalgamation, the bank does not include

the proﬁt for the ﬁnancial year in its own funds.

Based on permission from the Financial Supervi-

sory Authority, the member credit institutions of

the amalgamation are exempted, by a decision of

the central institution, from the own funds require-

ment for intra-group items, and from the restric-

tions imposed on major counterparties concerning

items between the central credit institution and

the member banks.

The statutory minimum for capital adequacy ra-

tio is 8 per cent and 4.5 per cent for CET1 capital.

In addition to the minimum capital adequacy ratio,

Bonum Bank is subject to ﬁxed additional capital

requirement, which is 2.5 per cent in accordance

with the Act on Credit Institutions, and to the var-

iable country-speciﬁc additional capital require-

ments for foreign exposures. All additional capital

requirements have to be covered in full with tier 1

capital.

Bonum Bank’s leverage ratio was 4.7 (4.6) per cent

on 31 December 2024, as the required minimum

level is 3 per cent. With special permission from

the Financial Supervisory Authority, intra-amal-

gamation items are deducted from the amount of

leverage exposure in the calculation of the lever-

age ratio.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 13

SUMMARY OF CAPITAL ADEQUACY

Bonum Bank Ltd

Summary of capital adequacy (EUR 1,000) 31 Dec 2024 31 Dec 2023

Own funds

Common Equity Tier 1 capital before deductions 50,223 48,137

Deductions from Common Equity Tier 1 capital -641 -622

Total Common Equity Tier 1 capital (CET1) 49,582 47,515

Tier 1 capital (T1 = CET1 + AT1) 49,582 47,515

Total capital (TC = T1 + T2) 49,582 47,515

Total risk weighted assets 244,616 244,745

of which credit risk 184,242 196,019

of which credit valuation adjustment risk (CVA) 13,647 6,658

of which market risk (exchange rate risk) 1,724 1,248

of which operational risk 45,002 40,820

Fixed capital conservation buffer according to Act on Credit

institutions (2.5%)

6,115 6,119

Countercyclical capital buffer 62 65

CET1 Capital ratio (%) 20.3% 19.4%

T1 Capital ratio (%) 20.3% 19.4%

Total capital ratio (%) 20.3% 19.4%

Capital requirement

Total capital 49,582 47,515

Capital requirement * 25,746 25,764

Capital buffer 23,835 21,752

Leverage ratio

Tier 1 capital (T1) 49,582 47,515

Leverage ratio exposure 1,064,058 1,024,580

Leverage ratio, % 4.7% 4.6%

* The capital requirement comprises the minimum requirement of 8%, the capital conservation buffer of 2.5% and the

country-speciﬁc countercyclical capital requirements of foreign exposures.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 14

INTERNAL CONTROL

The purpose of the Bonum Bank’s internal control

is to ensure that the Bank, in a systematic and ef-

fective manner, works towards the goals and imple-

ments the procedures conﬁrmed by senior manage-

ment. Internal control aims to ensure that the or-

ganisation complies with regulations and manages

risks comprehensively, and that its operations are

efﬁcient and reliable.

Internal control is implemented at all levels of the

organisation. Internal control is implemented by the

Board of Directors, the CEO and other management

and personnel, as well as the risk management and

compliance functions independently of business

operations. As part of internal control, the amalga-

mation has implemented a whistle-blowing mech-

anism that enables the bank’s employees to report,

internally through an independent channel, suspect-

ed violations of rules and regulations concerning

the ﬁnancial market in the central institution or a

member credit institution.

INTERNAL AUDIT

Within the amalgamation, POP Bank Centre coop

is centrally responsible for the steering and organ-

isation of internal audit in the bank centre, mem-

ber credit institutions and other companies of

the amalgamation. Bonum Bank’s internal audit is

based on the internal audit guidelines conﬁrmed by

the Board of Directors and the Supervisory Board of

POP Bank Centre coop as well as on the audit plan

approved by the Board of Directors of POP Bank

Centre coop.

The purpose of internal audit is to assess the scope

and sufﬁciency of the internal control of the Bank’s

operational organisation and to monitor and assess

the functionality of risk management systems. In-

ternal audit reports its observations primarily to the

Bank’s Board of Directors. After audits, the Bank’s

Board of Directors discusses the summaries pre-

pared as a result of the internal audit. Internal Audit

reports of its activity and observations regularly to

central institution’s Supervisory Board, central insti-

tution’s Board and CEO.

The internal audits conducted in the Bank during

the year were carried out by the internal audit unit

of the central institution.

BONUM BANK’S MANAGEMENT

AND PERSONNEL

Bonum Bank’s Annual General Meeting of 3

April 2024 adopted the ﬁnancial statements

for 2023 and granted discharge from liability to

the Bonum Bank’s Board members and the CEO.

The Board of Directors of Bonum Bank had four

members. During the year, the Board has con-

vened 21 times.

Regular board members were:

Jaakko Pulli, CEO

Chairman of the Board

Hanna Linna, CEO

Vice Chairman of the Board

Ilkka Lähteenmäki, Adjunct Professor

Member of the Board

Kirsi Salo, CEO

Member of the Board

Bonum Banks CEO is Pia Ali-Tolppa and CEO’s

deputy is Timo Hulkko.

On 31 December 2024, the Bank had 102 employ-

ees, of which 102 with permanent employment

contract. Out of the total of 102 employees, 95

worked full-time. Employees’ professional com-

petence is maintained and developed in line with

the bank’s needs and changing operating en-

vironment, as well as with employees’ individual

competence requirements and changes therein.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 15

AUDIT

The company’s auditor was KPMG Oy Ab, author-

ized public accountants, with Tiia Kataja, author-

ised public accountant, as the principal auditor.

CORPORATE GOVERNANCE

The Bank’s functions are controlled by its share-

holder, which exercises its decision-making pow-

er at the General Meeting in accordance with the

Finnish Limited Liability Companies Act and the

Articles of Association. The Annual General Meet-

ing decides on the distribution of the Bank’s proﬁt

and elects the members of the Board of Directors.

The Bank is represented by and directed by the

Board of Directors. Operational decisions con-

cerning the Bank’s business operations and stra-

tegic issues are made by the Bank’s Board of Di-

rectors. The work of the Board of Directors is based

on the Bank’s Articles of Association, decisions of

the General Meeting and applicable legislation.

The Bank’s CEO manages the Bank’s operational

activities in accordance with the instructions pro-

vided by the Board of Directors.

The investigation of the independence of Board

members and the CEO takes place in accord-

ance with regulations issued by the Finnish Finan-

cial Supervisory Authority. Board members and the

CEO shall provide an account of the entities in

which they operate when they are elected to their

ofﬁce. In addition, Board members and the CEO

shall provide an account of ﬁtness and propriety

according to the regulation by the Financial Su-

pervisory Authority when they accept their duties.

Bonum Bank PLC’s annual Corporate Govern-

ance statement is available at https://www.pop-

pankki.ﬁ/en/investors/information-for-investors/

bonum-bank/corporate-governance.

REMUNERATION

The Board of Directors of Bonum Bank is respon-

sible for matters related to remuneration. Bonum

Bank does not have a remuneration committee

appointed by the Board to manage its remuner-

ation scheme. It has not been deemed necessary

to establish a remuneration committee, con-

sidering the quality, scope and diversity of the

bank’s operations. Bonum Bank’s Board of Direc-

tors monitors compliance with the remuneration

scheme and assesses its functionality annually.

The central institution’s internal audit function

veriﬁes at least once a year whether the remu-

neration scheme, as approved by the Board of

Directors, has been complied with. The compen-

sation of control functions’ personnel is inde-

pendent of the business area being supervised.

RELATIONSHIP BETWEEN REMUNERATION AND

RESULT

The remuneration scheme must be in line with

the Bank’s business strategy, goals, values and

long-term interests and support the Bank’s long-

term beneﬁt. It must also be consistent with and

promote the Bank’s sound and effective risk

management and risk-bearing capacity The re-

muneration scheme must also support good cor-

porate governance.

CRITERIA USED IN THE ASSESSMENT OF

PERFORMANCE, RISKBASED CHANGES TO THE

AMOUNT OF REMUNERATION, POSTPONEMENT

PRACTICES AND PAYMENT CRITERIA

At Bonum Bank, variable bonuses paid to an in-

dividual are not allowed to exceed EUR 100,000

over a one-year earnings period. The bank may

decide not to pay any variable bonuses in full or

in part if its ﬁnancial position has become weak-

er to such an extent that, based on the Board’s

estimate, the payment of performance bonuses

would be unreasonable, considering the bank’s

situation.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 16

Severance pay or other compensation paya-

ble to an employee can be paid if employment

terminates prematurely. The principles of Act on

Credit Institutions chapter 8 are taken into ac-

count in payment, and the payment criteria are

laid down so that compensation is not paid for

failed performance.

FIXED AND VARIABLE COMPENSATION

In the bank’s remuneration scheme, variable bo-

nuses may not exceed 100% of the ﬁxed annual

salary.

KEY PARAMETERS AND CRITERIA APPLIED

IN THE SPECIFICATION OF VARIABLE

COMPENSATION AND OTHER FRINGE BENEFIT

The Bank’s variable compensation is subject to

the following principles

1. The payment criteria for variable compensa

tion will be determined and communicated to the

recipients in advance. The Board may also reward

employees for exceptional performance without

such predetermined grounds with a bonus equal-

ling no more than one month’s salary.

2. The compensation must be based on an overall

assessment of the performance of the recipient

and the related function. Their performance must

be evaluated over the long term.

3. When determining the bonus amounts, the

risks known at the time of the assessment must

be taken into account, as well as future risks,

capital costs and the necessary solvency.

4. The compensation beneﬁciary may be entitled

to variable compensation, which can be only paid

if the compensation beneﬁciary has not violated

the regulations, instructions or operating princi

ples and procedures deﬁned by the credit insti-

tutions, which generate obligations to the credit

institution, or contributed to such action through

their acts or failure to act. It must also be possi-

ble to not pay or to recover the variable compen-

sation if the credit institution becomes aware

of such action only after the compensation has

been determined or paid.

5. The Bank may commit to unconditional pay-

ment of compensation (non-recoverable com-

pensation) only for particularly weighty reasons

and provided that the promised compensation

only targets the ﬁrst year of employment of the

compensation beneﬁciary.

AGGREGATE INFORMATION ON

COMPENSATION TO THE MANAGEMENT AND

MEMBERS OF PERSONNEL WHO HAVE A

SIGNIFICANT IMPACT ON THE BANK’S RISK

PROFILE

The Bank maintains a list of the following per-

sons and the compensation paid to them:

6. CEO and members of the management team,

7. Other persons whose actions have a signif-

icant impact on the risk position of the central

institution or amalgamation,

8. Persons who work in the risk control function,

risk management tasks, compliance function or

internal audit function,

9. Another person whose total amount of com-

pensation is not signiﬁcantly different from the

total amount of compensation of the persons re-

ferred to in items 1 and 2.

PAID COMPENSATION

During the ﬁnancial period, the Bank has paid

variable compensation payments in total EUR

246 thousand. No start-up payments were paid

during ﬁscal year. The Bank did not pay compen-

sation of over EUR 1 million during the ﬁnancial

period.

KEY OUTSOURCED OPERATIONS

Bonum Bank’s bank system is outsourced to Sam-

link Ltd. Bonum Bank’s accounting is managed at

Figure Taloushallinto Ltd., which POP Bank Group

owns together with other customer banks of the

company. Payment message handling at Bonum

Bank is carried out through SWIFT Service Bureau

provided by Tietoevry Oyj and SEPA Instant Pay-

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 17

ment Gateway and, excluding internal payments

within the POP Bank Group. In addition, the Bank

uses a platform service provided by a subsidiary

of Google Inc. for customer data management and

payment monitoring system provided by SAS In-

stitute Oy. Some card business services are out-

sourced to Samlink Ltd., Nets Denmark A/S Finnish

Branch, Intrum Justitia Ltd. and Evry Card Servic-

es Ltd.

DEPOSIT GUARANTEE

Bonum Bank is a member of the Deposit Guaran-

tee Fund, which protects the deposits of custom-

ers to a maximum of EUR 100 thousand. The de-

posit banks that are members of the amalgama-

tion of deposit banks are considered to be a single

deposit bank in terms of deposit guarantee. There-

fore, the deposit guarantee concerning a depos-

itor’s deposits in all member credit institutions of

the amalgamation of POP Banks (POP Banks and

Bonum Bank) totals EUR 100,000. Bonum Bank’s

operations focus on central credit institution ser-

vices provided for the member banks of the amal-

gamation. Therefore, the Deposit Guarantee Fund

is of minor signiﬁcance.

SOCIAL RESPONSIBILITY

Bonum Bank operates as part of the POP Bank

Group and supports the responsibility efforts of

the local POP Banks. The POP Bank Group pub-

lishes a sustainability report as part of its man-

agement report. The POP Bank Group’s man-

agement report and consolidated IFRS ﬁnan-

cial statements are published on the website at

www.poppankki.ﬁ.

Bonum Bank holds Green Ofﬁce environmental

management system certiﬁcation by the WWF.

The themes of the bank’s programme include en-

hanced recycling and reduced energy consump-

tion, as well as a reduction in emissions caused

by mobility. The goals also include increasing en-

vironmental awareness across the bank’s organ-

isation and among partners through effective

communication.

EVENTS AFTER THE CLOSING

DAT E

Bonum Bank’s Board of Directors is not aware of

any events having taken place after the closing

date that would have a material impact on the in-

formation presented in the ﬁnancial statements.

OUTLOOK FOR 2025

The outlook for the Finnish economy is becom-

ing more positive. Exports are expected to pick

up thanks to the strengthening of the European

economy and a large number of cruise ship deliv-

eries. The employment situation is also expected

to improve early in the year, as growth in house-

hold consumption contributes to the positive em-

ployment trend. However, the geopolitical situa-

tion remains unstable.

The general focus will be on increasing operation-

al efﬁciency and improving proﬁtability. Bonum

Bank’s personnel are involved in the POP Bank

Group’s core banking system reform project to a

signiﬁcant degree.

The full-year result for 2025 is expected to be pos-

itive.

BOARD OF DIRECTORS’

PROPOSAL ON THE DISPOSAL OF

THE RESULT FOR THE PERIOD

Bonum Bank’s distributable funds were EUR

40,242 thousand. Bonum Banks Board of Direc

tors proposes to the Annual General Meeting

that the proﬁt EUR 784 thousand for the period

of be recognised in retained earnings.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 BOARD OF DIRECTOR’S REPORT 18

BOARD OF DIRECTORS’ AND FINANCIAL STATEMENTS REPORT

31.12.2024 (IFRS)

INCOME STATEMENT

(EUR 1,000) Note 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Interest income* 74,491 65,195

Interest expenses* -64,257 -52,196

Net interest income 3 10,233 12,999

Net commissions and fees 4 8,024 7,226

Net investment income 5 566 -769

Other operating income 6 6,451 5,167

Total operating income 25,275 24,623

Personnel expenses 7 -6,864 -5,409

Other operating expenses 8 -13,943 -11,982

Depreciation and amortisation 9 -473 -911

Total operating expenses -21,279 -18,302

Impairment losses on ﬁnancial assets 14 -3,018 -3,306

Proﬁt before taxes 978 3,015

Income tax expense 10 -194 -609

Proﬁt for the period 784 2,406

*The presentation method for interest income from derivative contracts has been changed. For the in-

terest on derivatives, the interest from one interest rate swap will henceforth be recorded on a net basis

rather than as gross interest income and gross interest expense. A reclassiﬁcation of EUR 9,469 thou-

sand from interest income to interest expenses was made for the comparative period. The change is de-

scribed in more detail in Note 1, under Changes in presentation method.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 19

STATEMENT OF OTHER COMPREHENSIVE INCOME

(EUR 1,000) Note

1 Jan - 31 Dec

2024

1 Jan - 31 Dec

2023

Proﬁt for the ﬁnancial period 784 2,406

Other comprehensive income

Items that will not be reclassiﬁed to proﬁt or

loss

Net changes in fair value of equity instruments 26 211 141

Capital gains and losses for equity instruments 26 23 -

Deferred taxes 21 -47 -28

Total 187 113

Items that may be reclassiﬁed to proﬁt or loss

Movement in fair value reserve for liability

instruments

26 469 1,368

Total 469 1,368

Other comprehensive income items total 656 1,481

Comprehensive income for the ﬁnancial year 1,440 3,887

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 20

BALANCE SHEET

(EUR 1,000) Note 31 Dec 2024 31 Dec 2023

Assets

Liquid assets 15 558,332 485,020

Loans and advances to credit institutions 12,16 1,020,697 849,549

Loans and advances to customers 12,16 197,579 193,373

Derivatives 13 22,395 9,220

Investment assets 12,17 218,689 259,963

Intangible assets 18 108 329

Property, plant and equipment 18 370 648

Other assets 20 31,992 39,309

Tax assets 21 347 207

Total assets 2,050,510 1,837,618

Liabilities

Liabilities to credit institutions 12,13,22 1,759,867 1,424,772

Liabilities to customers 12,13,22 14,060 33,435

Derivatives 23 8,674 1,798

Debt securities issued to the public 24 184,706 283,896

Other liabilities 25 31,938 42,970

Tax liabilities 21 257 203

Total liabilities 1,999,503 1,787,075

Equity capital

Share capital 10,000 10,000

Reserves 30,657 30,001

Retained earnings 10,350 10,543

Total equity capital 26 51,007 50,543

Total liabilities and equity capital 2,050,510 1,837,618

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 21

STATEMENT OF CHANGES IN THE EQUITY CAPITAL

(EUR 1,000) Note

capital

Fair value

reserve

Other

reserves

Retained

earnings

Total

equity

Balance 1 Jan 2023 10,000 -1,480 30,000 8,136 46,657

Comprehensive income

for the ﬁnancial year

Proﬁt for the

ﬁnancial year

- - - 2,406 2,406

Other

comprehensive

income

21,26

- 1,481 - - 1,481

Total comprehensive

income for the ﬁnancial

year

- 1,481 - 2,406 3,887

Balance 31 Dec 2023 10,000 1 30,000 10,543 50,543

(EUR 1,000) Note

capital

Fair value

reserve

Other

reserves

Retained

earnings

Total

equity

Balance 1 Jan 2024 10,000 1 30,000 10,543 50,543

Comprehensive income for

the ﬁnancial year

Proﬁt for the ﬁnancial

year

- - - 784 784

Other comprehensive

income

21,26

- 656 - - 656

Total comprehensive

income for the ﬁnancial

year

656 784 1,440

Dividends 26

- - - -1,000 -1,000

Other changes 26

- - - 23 23

Balance 31 Dec 2024

10,000 657 30,000 10,350 51,007

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 22

CASH FLOW STATEMENT

(EUR 1,000) Note

1 Jan - 31 Dec

2024

1 Jan - 31 Dec

2023

Cash ﬂow from operating activities

Proﬁt for the ﬁnancial year 784 2,406

Adjustments to proﬁt for the ﬁnancial year 2,667 6,507

Increase (-) or decrease (+) in operating assets -122,324 189,257

Advances to credit institutions 16 -164,591 325,834

Advances to customers 16 -7,173 -26,140

Investment assets 17 42,123 -94,247

Other assets 20 7,317 -16,191

Increase (+) or decrease (-) in operating liabilities 299,007 287,525

Liabilities to credit institutions 22 329,165 287,465

Liabilities to customers 22 -19,375 -22,495

Other liabilities 25 -10,782 22,555

Income tax paid -445 -1,318

Total cash ﬂow from operating activities 177,02 3 484,377

Cash ﬂow from investing activities

Investments in shares and other equity, decreases 23 -21

Purchase of PPE and intangible assets -5 -

Total cash ﬂow from investing activities 18 -21

Cash ﬂow from ﬁnancing activities

Payment of lease liabilities 29 -281 -175

Debt securities issued, increase 24 86,968 129,273

Debt securities issued, decrease 24 -185,526 -168,219

Total cash ﬂow from ﬁnancing activities -98,839 -39,121

Change in cash and cash equivalents

Cash and cash equivalents at period-start 888,758 443,523

Cash and cash equivalents at the end of the period 968,626 888,758

Net change in cash and cash equivalents 79,868 445,235

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 23

(EUR 1,000) Note

1 Jan - 31 Dec

2024

1 Jan - 31 Dec

2023

Cash and cash equivalents

Liquid assets 15 558,332 485,020

Receivables from credit institutions payable on

demand

16 410,294 403,738

Total 968,626 888,758

ADDITIONAL INFORMATION OF THE CASH FLOW

STATEMENT

Interest received 77,677 62,884

Interest paid 66,468 46,413

Dividends received 8 7

ADJUSTMENTS TO RESULT FOR THE FINANCIAL

YEAR

Non-cash items and other adjustments

Change in deferred taxes 12 -20

Net changes in fair value -372 944

Income taxes 182 629

Impairment losses on receivables 3,216 3,306

Depreciation 473 911

Other -844 738

Adjustments to proﬁt for the ﬁnancial year 2,667 6,507

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 24

GENERAL

BONUM BANK PLC AND POP BANK GROUP

Bonum Bank Plc (hereinafter ‘Bonum Bank’) is

a subsidiary wholly owned by POP Bank Cen-

tre coop and a member credit institution in the

amalgamation of POP Banks, acting as the cen-

tral credit institution for the member banks of

the POP Bank Centre coop (POP Banks). Bonum

Bank takes care of POP Banks’ payment trans-

fer accounts and transfers payment transactions

between the customers of POP Banks and other

banks, makes the minimum reserve deposits for

POP Banks in the Bank of Finland, receives depos-

its for POP Banks and grants credits to POP Banks

that they need to ensure their liquidity. In addition,

Bonum Bank manages the liquidity of the amalga-

mation of POP Banks and operates in the ﬁnanc-

ing wholesale market by issuing unsecured senior

bonds. Bonum Bank’s duties also include opera-

tions related to Visa cards of POP Banks’ custom-

ers. Bonum Bank’s registered ofﬁce is Espoo. Copy

of Bonum Bank’s ﬁnancial statements are availa-

ble from its ofﬁce at Hevosenkenkä 3, FI-02600

Espoo, and online at www.poppankki.ﬁ.

Bonum Bank belongs to the POP Bank Group. The

POP Bank Group consists of the amalgamation of

POP Banks and companies over which it has con-

trol. The Group is engaged in banking business. The

central institution for the amalgamation of POP

Banks is POP Bank Centre coop. Its members con-

sist of Bonum Bank and 18 co-operative banks

and POP Mortgage Bank Plc. The amalgamation of

POP Banks is an economic entity speciﬁed in the

Act on the Amalgamation of Deposit Banks, the

members of which are jointly liable for each other’s

debts and commitments.

The central institution of POP Banks has pre-

pared the POP Bank Group’s consolidated ﬁnan-

cial statements in accordance with the Act on the

Amalgamation of Deposit Banks. Copies of the

ﬁnancial statements of the POP Bank Group are

available online at www.poppankki.ﬁ or from the

ofﬁce of the central institution, address Hevosen-

kenkä 3, 02600 Espoo, Finland. POP Bank Group

will present information concerning risks speciﬁed

in the EU Capital Requirements Regulation (EU

2019/876) (CRR) in a separate Pillar III report.

BASIS OF PREPARATION OF FINANCIAL

STATEMENTS

Bonum Bank’s ﬁnancial statements have been pre-

pared in accordance with International Financial

Reporting Standards (IFRS) approved in the EU and

the related Interpretations (IFRIC). The applicable

Finnish accounting and corporate legislation and

regulatory requirements have also been taken into

account when preparing the notes to the ﬁnancial

statements.

Figures in the notes are rounded, whereby the sum

total of individual ﬁgures may deviate from the sum

total presented in the calculations and tables. As-

sets and liabilities denominated in currencies oth-

er than euro have been translated into euro at the

exchange rate of the balance sheet date. Exchange

rate differences resulting from measurement have

been recognised in net investment income in the

income statement.

Bonum Bank has no subsidiaries or associated

companies.

CHANGES IN PRESENTATION METHOD

Bonum Bank has clariﬁed the presentation method

for interest related to hedging derivative contracts.

Unlike the previous presentation method, the inter-

est from a single derivative contract will now be re-

corded on a net basis instead of as gross interest

income and gross interest expense. Interest from

derivatives hedging assets will be presented in the

income statement under interest income, and inter-

est from derivatives hedging liabilities will be pre-

NOTES

NOTE 1 ACCOUNTING POLICIES

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 25

sented under interest expenses. The presentation

method for interest liabilities and receivables has

also been modiﬁed, such that the interest from de-

rivative contracts is shown as a net amount in ei-

ther “other assets” or “other liabilities” on the bal-

ance sheet, depending on the interest payment

situation at each reporting date. Comparative pe-

riod data in the income statement has been ad-

justed to match the new presentation method. No

corresponding adjustment has been made on the

balance sheet. This adjustment has no impact on

net interest income. The detailed euro impacts of

the presentation change are shown in the income

statement and in Note 3 regarding net interest in-

come.

ACCOUNTING POLICIES REQUIRING MAN-

AGEMENT’S JUDGEMENT AND UNCERTAINTY

FACTORS AFFECTING ESTIMATES

The application of the IFRS requires the manage

ment to make estimates and assumptions concern-

ing the future that affect the amounts of items pre-

sented in ﬁnancial statement calculations, as well

as the information provided in the notes. The man-

agement’s key estimates concern the future and key

uncertainties related to the values on the balance

sheet date. Such key estimates are related to fair

value measurement in particular, as well as the im-

pairment of ﬁnancial assets and intangible assets.

The management’s estimates and assumptions are

based on the best view at the balance sheet date,

which may differ from the actual result.

DETERMINING FAIR VALUE

The management must assess whether the mar-

kets for ﬁnancial instruments are active or not. Fur-

thermore, the management must assess whether an

individual ﬁnancial instrument is subject to active

trading and whether the price information obtained

from the market is a reliable indication of the in-

strument’s fair value. When the fair value of ﬁnancial

instruments is determined using a valuation tech-

nique, the management’s judgement is needed in

the choice of the valuation technique to be applied.

Insofar as there is no market input available for the

techniques, management must evaluate how other

data can be used for the valuation.

IMPAIRMENT

Calculation of the expected credit losses includes

parameters requiring management’s consideration.

Management has to determine the method of tak-

ing macroeconomic information into consideration

in the calculations, the principles of evaluating sig-

niﬁcant increases in the credit risk, the assessment

of loss in default and the credit conversion factors

applied to credit cards.

The policies on impairment of ﬁnancial assets have

been presented in detail in chapter Impairment of ﬁ-

nancial assets.

The amount recoverable from intangible assets is

determined in the impairment assessment on the

basis of the use value or fair value of the asset. Im-

pairment testing requires management’s judgement

and assessment of the recoverable amount of the

asset in question, as well as the interest rate used

for discounting. In addition, management’s judge-

ment is required for the evaluation of intangible as-

sets under development.

CHANGES IN ACCOUNTING POLICIES

ADOPTION OF NEW IFRS STANDARDS,

AMENDMENTS TO STANDARDS AND

INTERPRETATIONS

No new IFRS standards were adopted during the ﬁ-

nancial year in Bonum Bank’s ﬁnancial statements.

ADOPTION OF NEW IFRS STANDARDS,

AMENDMENTS TO STANDARDS AND

INTERPRETATIONS IN FUTURE FINANCIAL YEARS

The standard amendments approved for application

in the ﬁnancial year beginning 1 January 2025 are

not estimated to have an impact on Bonum Bank’s

ﬁnancial statements.

Bonum Bank intends to adopt IFRS 18 Presenta-

tion and Disclosures standard for the ﬁnancial year

commencing 1 January 2027, if the standard has

been approved for application in the EU. The Stand-

ard shall be applied in periods beginning on or after 1

January 2027, but its earlier application is permitted.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 26

IFRS 18 supersedes IAS 1 Presentation of Financial

Statements. The adoption of the standard will have

an impact on the presentation of Bonum Bank’s ﬁ-

nancial statements. Bonum Bank will assess the im-

pact of the standard during the ﬁnancial year 2025.

Other standard amendments to be adopted lat-

er are not expected to have a material impact on

Bonum Bank’s ﬁnancial statements.

FINANCIAL INSTRUMENTS

CLASSIFICATION AND RECOGNITION

Financial assets are classiﬁed on initial recognition

into following measurement categories based on

the business model followed in their management

and the debt instruments’ cash ﬂow characteris-

tics:

● Financial assets at amortised cost

● Financial assets at value through other com-

prehensive income

● Financial assets recognized at fair value

through proﬁt and loss.

In accordance with the IFRS 9 Financial instru-

ments, Financial liabilities are classiﬁed on initial

recognition into following measurement categories:

● Financial liabilities at amortised cost

● Financial liabilities at fair value through proﬁt

and loss

On initial recognition, all ﬁnancial assets and ﬁnan-

cial liabilities are recognised at fair value. Transac-

tion costs from other ﬁnancial instruments are in-

cluded in the acquisition cost.

Purchases and sales of ﬁnancial instruments are

recognised on the settlement date. Loans grant-

ed are recognised in the balance sheet on the date

when the customer draws down the loan. Instru-

ments issued are recognised in the balance sheet

on the date when the customer makes the sub-

scription.

Financial assets and ﬁnancial liabilities are offset

in the balance sheet if Bonum Bank currently has

a legally enforceable right of set-off in the normal

course of business and in the event of default, in-

solvency or bankruptcy, and it has the intention and

ability to settle the asset and liability on a net ba-

sis. Bonum Bank has not offset the ﬁnancial assets

and ﬁnancial liabilities on the balance sheet.

A ﬁnancial asset is derecognised when the con-

tractual rights to the cash ﬂows from the ﬁnancial

asset expire, or when the rights have been trans-

ferred to another party so that substantially all the

risks and rewards of ownership of the ﬁnancial as-

set are transferred. In addition, an agreement in-

cluded in ﬁnancial assets is derecognised on the

balance sheet if the rights to cash ﬂows that are

based on the agreement are transferred to anoth-

er party or if the agreement includes an obligation

to pay the cash ﬂows in question to one or several

recipients. If a consideration is received, but all the

risks and rewards of ownership of the transferred

asset are substantially retained, the transferred as-

set is recognised in its entirety and a ﬁnancial li-

ability is recognised for the consideration received.

Impaired ﬁnancial assets are derecognised when

no further payments are expected and the actu-

al ﬁnal loss can be determined. In connection to

derecognition, the previously recognised expected

credit loss is cancelled and the ﬁnal credit loss is

recognised. Payments on derecognised receivables

received later are recognised in the income state-

ment as an adjustment of impairment losses.

Financial liabilities are derecognised when the re-

lated obligations have been fulﬁlled and they have

been extinguished. An exchange of a debt instru-

ment with substantially different terms or substan-

tial modiﬁcation of the terms of an existing ﬁnan-

cial liability is accounted for as an extinguishment

of the original ﬁnancial liability and the recognition

of a new ﬁnancial liability.

BUSINESS MODELS FOR MANAGING FINANCIAL

ASSETS AND MEASUREMENT

According to IFRS 9, an entity’s business model re-

fers to how an entity manages its ﬁnancial assets

in order to generate cash ﬂows. That is, entity’s

business model determines whether cash ﬂows will

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 27

result from collecting contractual cash ﬂows, sell-

ing ﬁnancial assets or both. The business model is

determined at a level that reﬂects how ﬁnancial as-

set groups are managed together to achieve a par-

ticular business objective.

In Bonum Bank, ﬁnancial assets are managed ac-

cording to three business models:

1. Financial assets held (objective to collect cash

ﬂows)

2. Combination of ﬁnancial assets held and sold (ob-

jective to collect cash ﬂows and sale)

3. Other long-term investments

Financial assets held -business model includes

loans and receivables and debt instruments held to

maturity, which pass the SPPI-test (Solely Payments

of Principal and Interest) for their cash ﬂow charac

teristics. In the SPPI test it is determined whether the

asset’s contractual cash ﬂows are solely payments

of principal and interest on the principal amount

outstanding.

Combination-business model includes debt instru-

ments with contractual cash ﬂows being solely pay-

ments of principal and interest, held to maturity or

close to maturity or sold for example to reach the

targets of the investment strategy.

Other long-term investments -business model in-

cludes shares and other instruments, whose cash

ﬂows do not consist solely on payments of principal

and interest.

Bonum Bank does not actively trade ﬁnancial assets.

The purpose of Bonum Bank’s investment activities

is to invest liquidity surplus with long-term objective

and to maintain investment portfolio for liquidity pur-

poses.

Financial assets measured at amortised cost

Financial assets measured at amortised cost in-

cludes loans and receivables and the debt instru-

ments, which are, according to the investment pol-

icy, intended to be held to maturity with terms of

regular payments of interest and principal either in

part or entirety (SPPI-test). In addition, liquid assets,

in which the liquidity does not have to be tested by

regular sales, may be classiﬁed to this measurement

class. Bank is able to sale ﬁnancial assets measured

at amortised cost in case of not receiving payments

from the customer.

Financial assets measured at fair value through

other comprehensive income

Financial assets measured at fair value through oth-

er comprehensive income includes debt instruments,

which are, according to the investment policy, in-

tended to be held in order to collect contractual cash

ﬂows or sold, if necessary, for reaching the objectives

of the business model (combination-business model).

Classiﬁcation requires, that the contractual terms of

the instrument include regular payments of interest

and principal either in part or in entirety (SPPI-test).

Among other things, investments which can be sold

to cover liquidity needs, for example, and liquid assets

which have to be tested on regular sales in order to

demonstrate the liquidity of those assets are classi

ﬁed to this measurement class.

Changes in ﬁnancial instrument’s fair value is recog-

nised in items of other comprehensive income. The

increase and decrease of expected credit losses are

recognised in the income statement and in items of

other comprehensive income. Proﬁt and loss from for-

eign currencies are also recognised in other compre-

hensive income. When sold, the chance in fair value

as well as the proﬁt and loss from foreign currencies

are recognised from other comprehensive income to

net investment income in the income statement and

expected credit loss in impairment losses on ﬁnancial

assets in the income statement.

Financial assets measured at fair value through

proﬁt or loss

Financial asset is measured at fair value through

proﬁt or loss unless it is measured at amortised cost

or at fair value through other comprehensive income.

Financial assets measured at fair value through prof-

it or loss include shares and participations and debt

instruments, which do not meet the SPPI-test. An

exception is made with regards to shares which are

measured at fair value through other compr

ehensive

income.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 28

Bonum Bank does not have ﬁnancial assets held for

trading purposes or ﬁnancial assets measured at fair

value through proﬁt or loss. Derivative contracts used

for hedging are measured at fair value through proﬁt

or loss.

Equity instrument assets measured at fair value

through other comprehensive income

Bonum Bank has adopted the exception in IFRS 9,

according to which changes in fair value of invest-

ments in shares may be recognised in other compre-

hensive income. The exception is adopted to invest-

ments in shares regarded strategic to Bonum Bank’s

business operations.

Changes in fair value are recognised in other com-

prehensive income. In case such an investment is

subsequently sold, the result of the sale is recog-

nised in equity. The election can be made only at ini-

tial recognition and it is irrevocable.

Financial liabilities measured at amortised cost

Bonum Bank’s ﬁnancial liabilities are measured at

amortised cost according to the effective interest

rate method. Financial liabilities measured at amor-

tised cost includes deposits and debt securities is-

sued to the public, liabilities to credit institutions as

well as other ﬁnancial liabilities. Bonum Bank has no

ﬁnancial liabilities measured at fair value through

proﬁt or loss.

Financial liabilities measured at fair value

Derivative contracts used for hedging are measured

at fair value through proﬁt or loss. Bonum Bank has

no other ﬁnancial liabilities measured at fair value

through proﬁt or loss.

DETERMINING FAIR VALUE

Fair value is the price that would be attained if the

asset was sold or would be paid to transfer the lia-

bility from one market party to another in a standard

business transaction taking place on a valuation day.

The fair value of a ﬁnancial instrument is determined

on the basis of prices quoted in an active market or,

where no active market exists, using standard val-

uation techniques. A market is considered as ac-

tive if price quotes are readily and regularly available

and represent actual and regularly occurring market

transactions on an arm’s length basis. Current bid

price is used as the quoted market price of ﬁnancial

assets.

If the market has a well-established valuation tech

nique for a ﬁnancial instrument for which there is no

direct market price available, the fair value is based

on the commonly used valuation model and on the

market quotations of the input data used in the

model.

If there is no well-established valuation technique in

the market, fair value is determined based on a spe-

ciﬁc valuation model created for the product in ques-

tion. The valuation models are based on widely used

measuring techniques, incorporating all the factors

that market participants would consider when set-

ting a price. The valuation prices used include market

transaction prices, the discounted cash ﬂow method,

as well as the fair value of another substantially sim-

ilar instrument at the reporting date. The valuation

methods take into account an estimate of the credit

risk, applicable discount rates, early repayment op-

tions, and other such factors that may impact reli-

able determination of the fair value of the ﬁnancial

instrument.

The fair values of ﬁnancial instruments are divided

into three hierarchical levels depending on how the

fair value is deﬁned:

● Quoted fair values in active markets for identi-

cal assets or liabilities (Level 1)

● Fair values that are determined using oth-

er input data than the quoted prices at Level 1,

which are observable for the assets or liabilities

either directly (e.g. prices) or indirectly (e.g. de-

rived from prices) (Level 2)

● Fair values determined by the input data, which

is essentially not based on the observable mar-

ket data (Level 3).

The fair value hierarchy level into which an item

measured at fair value is fully classiﬁed is deter-

mined by the input data, which is at the lowest lev-

el and is signiﬁcant in respect to the whole item. The

signiﬁcance of the input data is evaluated consid

er-

ing the whole item, which is valued at fair value.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 29

DERIVATIVE CONTRACTS AND HEDGE

ACCOUNTING

Bonum Bank centrally coordinates hedging of in-

terest rate risk with derivatives for the POP Bank

amalgamation.

The objective of hedge accounting is that fair value

changes of the hedging derivative and the hedged

instruments mainly overrule each other. The hedg-

ing relationship between the hedging derivative

contract and the hedged instrument and the ob-

jectives of risk management are documented be-

fore hedge accounting is applied. If there is a high

correlation between the change in the value of the

hedging derivative and the hedged instrument, the

hedging is considered effective.

Bonum Bank applies IFRS 9 Financial Instruments

to hedge accounting for all hedging relationships.

The hedged instrument of fair value hedging is

ﬁxed-rate deposits. Bonum Bank manages the in-

terest rate options used for the cash ﬂow hegding

and interest SWAPs used for fair value hedging of

the POP Bank Group member banks. The non hedg-

ing derivatives in Bonum Bank’s balance sheet are

hedging derivatives for the POP Bank amalgama-

tion.

The positive fair values of the derivative contracts

are presented as assets under Derivatives and

negative fair values as liabilities under Derivatives.

All derivative contracts are recognised and meas-

ured at fair value through proﬁt and loss. Chang-

es in the value of derivatives in hedge accounting

are recorded in the income statement under Net

income from Hedge accounting. The interest on

hedging derivative contracts is recorded on a net

basis, with the interest on derivatives hedging lia-

bilities presented under interest expenses. The in-

terest on derivative contracts is presented on the

balance sheet as a net amount under either other

assets or other liabilities, depending on the interest

payment position at each reporting date.

IMPAIRMENT OF FINANCIAL ASSETS

A loss allowance on ﬁnancial assets measured at

amortized cost or fair value through other compre-

hensive income and off-balance sheet credit com-

mitments is recognized on the basis of expected

credit losses. The expected credit loss of a ﬁnan-

cial instrument is determined as the difference be-

tween the contractual cash ﬂows that the entity is

entitled to receive under the contract and the cash

ﬂows expected to be received by the entity at the

original effective interest rate at the time of report-

ing.

To determine expected credit losses, ﬁnancial in-

struments are classiﬁed in stages from 1 to 3. Stage

1 represents ﬁnancial instruments whose credit risk

has not increased signiﬁcantly since the initial rec-

ognition. Expected credit losses are determined for

such ﬁnancial instruments based on expected loan

losses for 12 months. Stage 2 represents ﬁnancial

instruments whose credit risk has increased signif-

icantly after the initial recognition on the basis of

qualitative or quantitative criteria and, for stage 3,

ﬁnancial instruments whose counterparty has been

declared as default. Expected credit losses are

determined for ﬁnancial instruments classiﬁed in

Stage 2 and 3 based on the expected credit losses

over the entire life of the instrument.

Calculating expected credit losses in Bonum Bank

is based on three main segments:

● Private customers

● Corporate customers

● Investment portfolio

The calculation of expected credit losses is based

on the probability of default (PD), the loss ratio

(LGD, loss given default) and the exposure at de-

fault (EAD) for each contract on main segments.

The probability of default (PD) is measured by the

historical credit rating model. The credit rating

models are deﬁned for the three main segments

described above. Credit rating models construct-

ed using statistical methods are used to estimate

the PD of private and corporate customers.

Loss given default (LGD) refers to the expect-

ed portion of the loan loss on the remaining capi-

tal if the counterparty is classiﬁed as default. The

parameters for calculating loss shares in the POP

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 30

Bank Group are determined on the basis of expert

estimates. Industry-speciﬁc LGD data from the

Finnish market have been used to determine LGD

values.

The exposure at default (EAD) is calculated for

each loan and off-balance sheet item separately

on the basis of repayments under the terms of the

contract, with the exception of contracts without

maturity whose lifecycle is determined on the ba-

sis of expert judgment. In the EAD calculation of

off-balance sheet items, CCF coefﬁcients shall

be applied in accordance with the standardised

credit risk standard for the credit risk calculation,

with the exception of card credits for which a CCF

value has been determined on the basis of expert

judgment.

Estimated credit losses are estimated using future

information available with reasonable ease. For

the purpose of calculating expected credit loss-

es, the POP Bank Group has developed a model

based on three macroeconomic scenarios and re-

lated implementation probabilities to correct the

parameters used in the calculation when estimat-

ing expected credit losses. The macroeconomic

scenarios are based on the projected growth rate

of Finland’s Gross Domestic Product over the next

three years.

In the measurement of expected credit losses, a

transition will be made from the recognition of ex-

pected credit losses over 12 months to the rec-

ognition of expected credit losses throughout the

lifetime of the contract as the credit risk increas-

es signiﬁcantly after the initial recognition, after

which the contract is transferred from stage 1 to

stage 2. The credit risk is considered to have in-

creased signiﬁcantly, when forbearance meas-

ures to the contract have been made less than 12

months ago, contract has been overdue for more

than 30 days, or another qualitative risk factor has

been identiﬁed in the customer’s situation such as

a signiﬁcant change in the customer’s business

that is not yet reﬂected in the payment delay. In

addition, the credit risk is considered signiﬁcantly

increased if the counterparty credit rating has de-

teriorated signiﬁcantly. The threshold value deter-

mined by expert estimation of signiﬁcant impair-

ment is based on the change in PD value between

the time of reporting and the time of the contract

origination.

Bonum Bank applies the deﬁnition of default in ac-

cordance with Article 178 of Regulation 575/2013

of the European Parliament and of the Council

when calculating expected credit losses. Liabili-

ties are classiﬁed in stage 3 when they meet the

deﬁnition criteria. For non-retail customers, which

are customers with a turnover of more than EUR

50 million and liabilities of more than EUR 1 million,

the deﬁnition of default applies at customer lev-

el and to retail customers at contract level. How-

ever, all receivables from a retail customer are re-

corded as defaulted (customer-level default) if the

amount of the customer’s liabilities exceeds 20

per cent of the customer’s total liabilities.

The contract is considered defaulted at the lat-

est when the liability under the default criteria has

been continuously delayed for more than 90 days.

In addition, a customer is considered defaulted

when repayment is considered unlikely for exam-

ple if the customer has been declared bankrupt

or similar proceedings, or if the customer has for-

bearance measures that causes a change in the

present value of the liability of more than 1 per

cent. The contract or customer is considered de-

faulted for a period of 90 days after the conditions

for default have ceased to exist.

Bonum Bank does not have contracts that are

originated as impaired.

If the customer has not fulﬁlled the criteria for de-

fault for at least 3 months, the customer’s liability

will return to either stage 2 or stage 1, depending

on whether the exposures meet a signiﬁcant in-

crease in the credit risk criteria at the time of re-

turn. The contract will return from stage 2 to stage

1 without a separate trial period if the contract no

longer meets the criteria for signiﬁcant credit risk

growth.

Bonum Bank applies an exception to ﬁnancial as-

sets at fair value through proﬁt or loss other than

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 31

IFRS 9, in which all instruments with a low credit

risk are classiﬁed in stage 1 and instruments with

higher credit risk are classiﬁed in stage 2.

A loss allowance on ﬁnancial assets recognised

at amortised cost and fair value through other

comprehensive income and for off-balance sheet

items is recognised in the income statement. Loss

allowance in the income statement consists of the

expected credit loss calculated for the ﬁnancial

asset, where the expected credit losses previously

recognized have been deducted. A loss allowance

is cancelled if a ﬁnal credit loss is recognized for

the ﬁnancial asset. The loss allowance on ﬁnancial

assets recognized at amortized cost reduces the

carrying amount of the ﬁnancial assets. The loss

allowance for ﬁnancial assets at fair value through

other comprehensive income is recognised in the

statement of comprehensive income. The loss al-

lowance on off-balance sheet commitments is

recognised as a provision in other provisions and

liabilities.

INTANGIBLE ASSETS

Intangible assets included in Bonum Bank’s bal-

ance sheet mainly consist of acquisition costs of

information systems. The most important intangi-

ble assets are the information systems for central

credit institution operations and card business.

An intangible asset is recognized in the balance

sheet at acquisition cost if it is probable that the

expected economic beneﬁts associated with the

asset will ﬂow to the Bonum Bank and the acqui-

sition cost of the asset can be measured reliably.

Acquisition cost includes all costs that are direct-

ly attributable to bringing the asset to its work-

ing condition for its intended use. Bonum Bank has

capitalised also internally produced intangible as-

sets. The capitalised expenditures for internally

produced intangible assets includes, for example,

purchased services, in-house work and other ex-

ternal costs related to projects.

All of Bonum Bank’s intangible assets have a limit-

ed economical lifetime. The acquisition cost of in-

tangible assets is amortised in the income state-

ment on the basis of the estimated economical

lifetime of assets. The estimated economical life-

time is 3–5 years for information systems and 3–4

years for other intangible assets. The estimated

economical lifetime of the basic banking systems

may be longer, but not more than 10 years.

The amortisation of the acquisition cost of intan-

gible assets begins when the asset is ready to be

taken into use. Indications of impairment of intan-

gible assets are examined annually and intangible

assets are tested for impairment when necessary.

Research costs are recorded as expenses as they

occur.

Conﬁguration and customization costs related to

Software as a Service (SaaS) cloud service agree-

ments are recognized as prepayments or expens-

es, depending on whether the conﬁguration and

customization services are distinct from the ac-

tual cloud service agreement. In the cloud service

arrangement, the software is controlled by a third

party, and the software’s conﬁguration and cus-

tomization functions are not capitalized as an in-

tangible asset. The prepayment recognized under

the cloud service agreement is released as an ex-

pense during the agreement period from the time

the asset is ready for use.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment included in Bonum

Bank’s balance sheet consist of machinery and

equipment, which are measured at acquisition cost

less depreciation and impairment. Depreciation is

based on the useful life of the assets. The economic

life for machinery and equipment is 3–10 years.

Depreciation and impairment on property, plant and

equipment are recognised in the income statement

on depreciation, amortisation and impairment.

LEASES

Bonum Bank has acquired ofﬁce equipment and

business facilities for its use through contracts

classiﬁed as leases. At the time of establishing a

contract, Bonum Bank assesses whether the con-

tract is a lease or includes a lease. A contract is a

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 32

lease if it conveys the right to control the use of an

identiﬁed asset for a period of time in exchange for

a consideration.

Bonum Bank a lessee is required to recognise on its

balance sheet a right-of-use asset and a lease lia-

bility arising from a lease. Lease liabilities are pre-

sented under other liabilities and the related inter-

est expenses under net interest income. The right-

of-use asset is presented under property, plant and

equipment and depreciation is presented under de-

preciation and impairment losses. Bonum Bank has

applied the exemptions included in the standard,

according to which leases with a term of 12 months

or less, or leases where the underlying asset is of

low value, need not be recognised on the balance

sheet. The expenses arising from these leases are

recognised under other operating income.

A right-of-use asset is initially measured at ac-

quisition cost. After the beginning of the contract,

right-of-use assets are measured at acquisition

cost less accumulated depreciation and impair-

ment losses. Depreciation on a right-of-use as-

set is recognised using the straight-line method.

Depreciation period for commercial premises with

lease valid until further notice is generally 2 years.

For ﬁxed-term contracts, the depreciation period

is in principle the contractual period. Depreciation

times for ofﬁce equipment vary from 2 to 5 years.

A lease liability is initially measured at the present

value of the lease payments remaining unpaid at

the beginning of the contract. The incremental bor-

rowing rate of interest is used in the calculation of

lease liabilities. The interest rate used for addition-

al credit is the interest rate determined for credits

granted within the group.

The economic lifetime of a leased asset is taken in-

to consideration when determining the lease period.

The management’s estimates are signiﬁcant, par-

ticularly when determining the lease period for con-

tracts valid until further notice and the incremen-

tal borrowing rate of interest. Contracts valid until

further notice are assigned a lease period based

on the management’s estimate in cases when it is

reasonably certain that they are entered into for a

period that exceeds their notice period.

EMPLOYEE BENEFITS

Bonum Bank’s employee beneﬁts consist mainly

of short-term employee beneﬁts, such as salaries,

holiday pay and bonus payments, which are ex-

pected to be paid in connection with the work per-

formance they are related to or within the following

12 months.

Post-employment beneﬁts consist of pensions.

Statutory pension cover is arranged through ex-

ternal pension insurance companies. Bonum Bank’s

pension plans are deﬁned contribution plans. Ex-

penses from deﬁned contribution plans are rec-

ognised in personnel expenses in the period during

which they are charged by the insurance company.

Bonum Bank has no deﬁned beneﬁt pension plans.

PRINCIPLES FOR RECOGNISING INCOME

AND EXPENSES

Interest income and expenses

Interest income and expenses are amortised over

the maturity of the contract using the effective in-

terest rate method, in proportion to the remaining

carrying amount in the balance sheet. Interest in-

come and expenses are recognised in net interest

income.

Negative interest income paid by Bonum Bank is

shown in interest expenses, and the negative in-

terest expense charged to the customer bank is

shown in interest income.

Commission income and expenses

Commission income and expenses are general-

ly recognised on an accrual basis when the relat-

ed services are performed. Commissions and fees

relating to services performed over several years

are amortised over the service period. Commissions

and fees that are considered as an integral part

of the effective interest of a ﬁnancial instrument

are accounted for as an adjustment to the effec-

tive interest. However, commissions and fees relat-

ing to ﬁnancial instruments measured at fair value

through proﬁt or loss are recognised in the income

statement on initial recognition.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 33

Dividends

Dividends are primarily recognised when the Gen-

eral Meeting of Shareholders of the distributing en-

tity has made a decision on dividend pay-out and

the right to receive dividends has emerged. Divi-

dend income is recognised in net investment in-

come.

Income from development charges

Bonum Bank has collected development charges

included in other operating income from its cus-

tomer banks for the development of the central

credit institution operations and the card business.

These payments have not been recognised insofar

as they are used for covering expenses included in

the acquisition cost of an intangible asset. Unrec-

ognised payments have been treated as advances

and included in other liabilities in the balance sheet.

These payments are recognised when Bonum Bank

uses the intangible asset to earn income.

Net interest income

Interest income and expenses on ﬁnancial assets and liabilities, the

amount of amortisation on the difference between the nominal and

acquisition values, interest on interest-rate derivatives and fees

that are accounted as part of the ﬁnancial asset’s effective inter-

est

Commission income and ex-

penses

Commission income from lending, deposits, commission income

and expenses from payments and card business, commission in-

come from securities

Net investment income

Sales gains and losses and dividend income from ﬁnancial in-

struments measured at fair value, net gains from foreign currency

transactions

Other operating income

Income from central credit institution services, shared service

center fees collected from banks and other operating income

Personnel expenses Wages and salaries, social expenses and pension expenses

Other operating expenses

Other administrative expenses, expenses related to low-value and

short-term leases, development expenses, charges to ﬁnancial au-

thorities and other expenses related to business operations

Impairment losses on ﬁnan-

cial assets

Impairment losses on ﬁnancial assets, expected credit losses and

realised credit losses and cancellations of credit losses

INCOME TAX

The income statement includes taxes on Bonum

Bank’s taxable income for the ﬁnancial year, ad-

justments to taxes from previous ﬁnancial years

and changes in deferred taxes. Tax expenses are

recognised in the income statement except when

they are directly linked to items entered into equi-

ty capital or other items in the statement of com-

prehensive income, in which case the tax effect is

also included in these items.

Deferred tax liabilities and assets are calculated

on taxable and deductible temporary differenc-

Presentation of income statement items

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 34

es between the carrying amount and the tax ba-

sis. Deferred tax assets are recognised to the ex-

tent that it is probable that taxable income will be

available against which the deductible temporary

difference can be utilised.

Deferred tax assets and liabilities are measured at

the tax rate that is expected to apply at the time

when the temporary difference is reversed.

A deferred tax asset is recognised for the carry

forward of unused tax losses to the extent that fu-

ture taxable proﬁt will be probable and unused tax

credits can be utilised.

SEGMENT REPORTING

Bonum Bank is engaged in the banking business.

Thus, the bank has only one operational segment,

which is why its ﬁnancial statements do not in-

clude segment reporting.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 35

NOTE 2 RISK MANAGEMENT

RISK AND CAPITAL ADEQUACY

MANAGEMENT POLICIES

The purpose of Bonum Bank’s risk management is

to ensure that the bank does not take such risks

in its operations that would result in a materi-

al threat to the capital adequacy or solvency of a

member credit institution, the central institution or

the entire amalgamation and support the strate-

gic target of risk management in POP Bank Group

and ensure for its own part the continuation the

operations at all circumstances. Risk-bearing ca-

pacity is built upon risk management proportion-

ated to the scope and complexity of the institu-

tion and adequate capitalization based on proﬁt-

able business operations. The purpose of the risk

management process is to ensure that all signif-

icant risks resulting from business activities are

identiﬁed, assessed, measured and monitored on

a regular basis and that they are proportionate to

the risk-bearing capacity of the Bonum Bank and

the amalgamation.

The purpose of capital adequacy management is

to ensure the adequate amount, quality and efﬁ-

cient use of the capital of the Bonum Bank. Cap-

ital is held to cover the material risks arising from

the Bank’s and amalgamation’s business strate-

gy and plan and to secure the uninterrupted op-

eration of the Bank and amalgamation in case of

unexpected losses. The goal is pursued through a

documented and systematic capital adequacy

management process that is integrally linked to

the amalgamation’s and other member credit in-

stitutions’ business planning and management.

POP Bank Centre coop, the central institution of the

amalgamation, is responsible for the risk and capital

adequacy management of the POP Bank Group. The

central institution provides guidance to the member

credit institutions to ensure risk management and

supervises that the member institutions operate in

accordance with regulation, their own rules, guide-

lines issued by the central institution and in ac-

cordance with appropriate and ethically acceptable

procedures. Bonum Bank, within limits set by con-

ﬁrmed business risk thresholds, carries its business

risks independently in its operations and is liable for

its capital adequacy. The capital adequacy, liquidi-

ty coverage ratio and customer risks of the Bonum

Bank are supervised both at the level of individual

member institutions and at the consolidated amal-

gamation level. Violations of the risk management

principles and limits are addressed in accordance

with the agreed operating models.

Bonum Bank conducts an extensive identiﬁcation

and evaluation of risks related to its operations

and sets risk-bearing capacity to match the total

amount of the risks. In order to secure the capital

adequacy, bank sets risk-based capital objectives

and prepares a capital plan to achieve these objec-

tives. Calculation methods deﬁned by the central

institution’s risk monitoring function are used when

preparing the capital plan.

The most signiﬁcant risks associated with Bonum

Bank’s operations are credit risk, liquidity risk, inter-

t rate risk and operational risk. The risk strat-

egy conﬁrmed by the Board of Directors of the

central institution outlines the risk appetite of the

operations, within which the Board of Directors of

the Bonum Bank sets its own guidelines and re-

strictions. Business activities are carried out at a

moderate risk level so that the risks can be man-

aged in full.

Risk and capital adequacy management is regu-

lated by EU legislation, Act on

Credit Institutions

(610/2014), Act on the Amalgamation of Depos-

it Banks (24.6.2010/599; hereinafter referred to as

the “Amalgamation Act”) and the standards, regu-

lations and guidelines issued by the Financial Su-

pervisory Authority.

Risk management is an essential part of the inter-

nal controls of Bonum Bank. The purpose of inter-

nal controls is to ensure that the institution com-

plies with regulations, carries out comprehensive

risk management and operates efﬁciently and re-

liably. Moreover, internal controls serve to ensure

that the objectives and goals set for different lev-

els of the amalgamation are achieved in accord-

ance with internal guidelines.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 36

ORGANISATION OF RISK AND CAPITAL

ADEQUACY MANAGEMENT

Bonum Bank is the central credit institution and

a member credit institution of the amalgamation

of POP Banks and a subsidiary of the POP Bank

Centre coop. The central institution issues binding

instructions concerning risk and capital adequacy

management, corporate governance and internal

control to the member credit institutions to secure

their solvency and capital adequacy. Furthermore,

common business controlling thresholds have

been established for the member institutions to

ensure that the risks taken by an individual mem-

ber institution are within acceptable limits.

Bonum Bank’s Board of Directors conﬁrms the ob-

jectives of the business operations, guidelines,

limits to the risk levels of the operations as well as

the risk-taking authorities. The Board of Directors

is also responsible for proactive capital planning

and adapting the capital adequacy management

planning and proactive capital planning into reli-

able governance and guidance. The Board of Di-

rectors assesses the appropriateness, extent and

reliability of capital adequacy management. The

Board of Directors sets the target level for capi-

tal adequacy and conﬁrms the level and structure

of capital required by the risk proﬁle. The executive

management is responsible for the risk manage-

ment of the daily operations within the scope of

the risk limits and risk-taking authority.

The executive management is responsible for the

practical implementation, continuous monitor-

ing, supervision and reporting of capital adequa-

cy and risk management to the Board of Directors

of the amalgamation. The executive management

also ensures that the responsibilities, authoriza-

tions, processes and reporting relationships relat-

ed to capital adequacy management have been

clearly deﬁned and sufﬁciently described and that

the employees are familiar with capital adequa-

cy management and the related processes and

methods to the extent required by their duties.

Bonum Bank’s independent risk monitoring is re-

sponsible for monitoring the risk limits and capital

adequacy in the business operations as well as re-

porting them to the Board of Directors and the in-

dependent risk management function of the cen-

tral institution of the amalgamation. The assign-

ment of Bonum Bank’s risk monitoring function is

to form a comprehensive view of the risks includ-

ed in the central credit institution services provid-

ed to the amalgamation’s member credit institu-

tions and the bank’s other operations, develop risk

management methods and processes for identify-

ing, measuring and monitoring risks in accordance

with the principles issued by the central institution.

The centralized compliance function of the central

institution supervises that the bank complies with

applicable laws, decrees, instructions and regula-

tions issued by the authorities, their own rules and

the internal binding guidelines issued by the cen-

tral institution of the amalgamation in its activ-

ities. As the central institution, POP Bank Centre

coop supervises the sufﬁciency and functioning of

the risk management systems in all the member

credit institutions in accordance with section 17 of

the Amalgamation Act.

The principles, organisation and internal control

measures of amalgamation’s risk and capital ad-

equacy management are described in more detail

in Note 4 to the POP Bank Group’s ﬁnancial state-

ments. Material information regarding capital ad-

equacy as speciﬁed in the Capital Requirements

Regulation (EU 575/2013) is presented in a sepa-

rate Pillar III report. Material information regarding

capital adequacy as speciﬁed in the Capital Re-

quirements Regulation (EU575/2013) is presented

in a separate Pillar III report. Copies of the ﬁnan-

cial statements of the POP Bank Group are avail-

able from the ofﬁce of the central institution, ad-

dress Hevosenkenkä 3, 02600 Espoo or through

the website www.poppankki.ﬁ.

CAPITAL ADEQUACY MANAGEMENT

The objective of capital adequacy management is

to ensure that the Bonum Bank has an adequate

capital buffer to achieve its business strategy

and to cover the material risks arising from them

in all circumstances. The capital adequacy posi-

tion is managed in accordance with the Bonum

Bank Board of Directors’ and Financial State-

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 37

ments Report for 1 January – 31 December 2020

35 risk-taking framework set by the central insti-

tution of the amalgamation.

The monitoring and control of the capital adequa-

cy position has been implemented by setting the

control thresholds for the adequacy in accordance

with the limits set by the central institution of

the amalgamation. The capital adequacy targets

(control limits) are set for the capital adequa-

cy ratio in accordance with Capital Requirements

Regulation (EU 575/2013) and it’s reformative reg-

ulation 2019/876 (hereinafter the EU Capital Re-

quirements Regulation) and for the economic cap-

ital requirement which is based on the internal risk

assessment (Pillar 2).

Capital adequacy management is pursued

through a systematic capital adequacy manage-

ment process that is integrally linked to the amal-

gamation’s and other member credit institutions’

business planning and management. As part of

the capital adequacy management process the

aim is to identify all material risks and assess their

magnitude and required capital levels.

Under the supervision of the central institution,

Bonum Bank prepares its own capital plan and

stress tests on an annual basis using harmonized

principles deﬁned by the central institution. The

process ensures that the Bank’s growth, proﬁta-

bility and risk-bearing capacity objectives are ap-

propriate and consistent. Capital is held to cover

the material risks arising from the Bank’s business

strategy and plan and to secure the uninterrupt-

ed operation of the Bank and amalgamation in

case of unexpected losses. The baseline scenario

of the capital plan forms the basis for budgeting

for Bonum Bank.

PILLAR I CAPITAL ADEQUACY RATIO

The most signiﬁcant Pillar I capital requirements of

Bonum Bank arises from retail banking receivables

as well as receivables in liquidity reserve investment

operations. The amalgamation applies the stand-

ardised approach for the calculation of the capital

requirement for credit risk, and the basic indicator

approach for calculating the capital requirement to

the operational risk. Bonum Bank does not engage

in trading activities, so the capital requirement for

market risk is only calculated for the foreign ex-

change risk. In the standardised approach for credit

risk, the exposures are divided into exposure classes

with limits having been set for the minimum diversi-

ﬁcation of lending in the retail exposure class.

Bonum Bank’s own funds consist of share capi-

tal, retained earnings and other non-restricted re-

serves, less the deductible items in accordance

with the EU’s Capital Requirements Regulation (No.

575/2013). The bank does not include the proﬁt ac-

crued during the ﬁnancial period in its own funds.

Bonum Bank releases the essential information in

terms of capital adequacy calculation annually as

part of its Board of Directors’ report and notes to

the ﬁnancial statements.

BUSINESS RISKS

CREDIT RISK

Bonum Bank’s most signiﬁcant risk is credit and

counterparty risk. Credit risk refers to a situation in

which a counterparty cannot fulﬁl its contractual

obligations.

The most signiﬁcant source of credit risk is loans,

but credit risk can also arise from other kinds of re-

ceivables, such as bonds, short-term debt securities

and off-balance-sheet commitments, such as un-

used credit facilities and overdraft limits and guar-

antees.

The credit risk of Bonum Bank’s operations consists

of liquidity reserve investment operations as well as

retail banking operations, for the most part formed

of unsecured lending. Balance sheet items exposed

to credit risk totalled EUR 418,712 (460,508) thou-

sand at the end of 2024. Bonum Bank’s off-bal-

ance sheet credit commitments amounted to EUR

185,172 (171,533) thousand. These consisted primar-

ily of unused credit card limits and POP Banks’ li-

quidity commitments.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 38

MANAGEMENT OF CREDIT RISK

The Board of Directors of the central institution

controls the credit risk management of the mem-

ber credit institutions, the methods used in it and

the control and reporting of credit risk. The Board

of Directors of the Bonum Bank approves the

credit risk strategy deﬁned by the central institu-

tion, specifying the target risk level and the prin-

ciples concerning guidelines on risk-taking, cus-

tomer selection and collateral. Credit risk man-

agement aims at limiting the effects of credit risks

resulting from lending activities on proﬁt and bal-

ance sheet to an acceptable level.

Credit risk strategy and other operative cred-

it risk guidelines specify the maximum limits for

risk concentrations and act as guidelines for the

targeting of lending by customer sector, industry

and credit grade. These guidelines form the ba-

sis of credit strategy and deﬁnes the customer

group and industry division principles and risk and

monitoring limits of the credit portfolio used in the

monitoring the quality of the credit portfolio. The

credit risk strategy is updated at least annually or

whenever there are essential changes in the oper-

ating environment or business model of the amal-

gamation, legislation or regulatory.

Automated lending credit decisions are made

based on an assessment of the customer’s cred-

it worthiness and with application scoring model,

as well as other credit criteria. Credit risk manage-

ment is implemented through active management

of credit policy and automated decision-mak-

ing guidelines based on monitoring and analy-

sis of credit risks. Credit monitoring is based on

continuous monitoring of payment behaviour and

non-performing receivables, monitoring the qual-

ity of the credit portfolio, as well as monitoring of

the amount of expected credit losses and ﬁnal

credit losses.

Credit decisions are based on the customer’s

credit worthiness and ability to pay and the ful-

ﬁlment of the other credit policy criteria, such as

collateral requirements. Collaterals are valued pru-

dently at fair value, and the development of val-

ues is monitored regularly. The collateral valuation

coefﬁcients are harmonized in the member credit

institutions of the amalgamation. Credit decisions

are made within the decision-making authoriza-

tions conﬁrmed by the Bank’s Board of Directors.

Credit risk of investment operations is mainly

managed by limiting the credit rating of invest-

ments and allocating investment assets by indus-

try, counterparty, credit rating and instrument cat-

egory. The allocation and limits of credit risks are

deﬁned in the investment plan and investment in-

structions approved by the Board of Directors. In-

vestment decisions are made within investment

plan and investment instructions approved by the

Board of Directors, by diversifying risks.

Monitoring expected credit losses is an essen-

tial part of the credit risk management. Principles

of impairment and calculation of expected cred-

it losses are described in Note 1 Accounting pol-

icies under IFRS. Impairment losses on loans and

receivables, off-balance sheet items and changes

during the ﬁnancial year are presented in Note 14

Impairment of ﬁnancial assets.

Risk management function reports exposures of

customers, expected credit losses and non-per-

forming receivables regularly to the Boards of Di-

rectors. The reports include, amongst other things,

the amount and development of credit risk by

customer group, industry sector and credit grade

category.

CREDIT RISK POSITION

At the end of the ﬁnancial year, Bonum Bank’s

total investment assets totalled EUR 218,689

(259,963) thousand. Investment assets decreased

mainly due to maturing debt instruments. The in-

vestment assets included in the liquidity reserve

include certiﬁcates of receivables issued by gov-

ernments, municipalities, credit institutions and

corporations, some of which are secured and

ECB-eligible loans.

The credit risk position of banking operations in

2024 remained in the same level as in 2023. To-

tal amount of expected credit losses and ﬁnal

write offs grew due to grown loan portfolio and

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 39

non-performing loans. The credit risk position of

banking operations is expected to grow in line with

the planned growth in the loan portfolio.

The loan portfolio of retail banking operations in-

creased by 2.2 per cent during the ﬁnancial year,

reaching EUR 197,579 (193,373) thousand. Loans

granted to retail customers accounted for 86.5

(86.3) per cent of the loan portfolio.

Loans and receivables are categorised in rating

categories 1–8 by probability of default (PD) of

the receivable. Rating category 1 represents the

receivables of the lowest risk and risk category 8

represents the receivables of the highest risk. Both

the customer and the receivable are categorised

as defaulted (rating category 8), if default crite-

ria described in accounting policies is met. Receiv-

ables categorised as defaulted are classiﬁed in

stage 3 as per IFRS 9 in the calculation of except-

ed credit losses. Receivables with a signiﬁcant in-

crease in credit risk are classiﬁed in stage 2. Other

receivables are classiﬁed in stage 1.

At the end of the ﬁnancial year, the gross amount

of loans and receivables, certiﬁcates of receiva-

bles and off-balance sheet items in the highest

risk category 8 totalled EUR 15,734 (12,660) thou-

sand.

The tables below show receivables from custom-

ers, debt securities and off-balance sheet com-

mitments in accordance with the stages deﬁned

in the calculation of expected credit losses by risk

category. The table also shows the lower and up-

per limits of the PD for each risk category.

RECEIVABLES FROM CREDIT INSTITUTIONS

(EUR 1,000,

gross value)

PD 31 Dec 2024

31 Dec

2023

Rating Class Lower Upper Stage 1 Stage 2 Stage 3 Total Total

1-4

0.00 1.50 570,000 - - 570,000 405,000

1.50 5.00 - - - - -

5.00 25.00 - - - - -

25.00 100.00 - - - - -

100.00 100.00 - - - - -

Total

570,000 - - 570,000 405,000

ECL

- - - - -

Total 570,000 - - 570,000 405,000

Loans and advances to credit institutions consist of intra-POP Bank Group items, the amount of which

increased by 40.7 per cent during the ﬁnancial year.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 40

OFF-BALANCE SHEET COMMITMENTS

(EUR 1,000,

gross value)

PD 31 Dec 2024 31 Dec 2023

Rating Class Lower Upper Stage 1 Stage 2 Stage 3 Total Total

1-4

0.00 1.50 177,034 564 - 177,597 166,961

1.50 5.00 6,137 71 - 6,208 3,358

5.00 25.00 499 361 - 860 789

25.00 100.00 - 13 - 13 29

100.00 100.00 - - 495 495 396

Total

183,669 1,008 495 185,172 171,533

ECL

284 31 70 386 306

Total 183,385 977 424 184,787 171,227

Off-balance sheet receivables mainly consist of unused credit card facilities 86,6% (84.5%) and in-

tra-group items 12.2% (13.1%).

RECEIVABLES FROM CUSTOMERS

(EUR 1,000,

gross value)

PD 31 Dec 2024 31 Dec 2023

Rating Class Lower Upper Stage 1 Stage 2 Stage 3 Total Total

1-4

0.00 1.50 95,365 79 - 95,444 99,546

1.50 5.00 64,270 622 - 64,892 47,918

5.00 25.00 25,854 3,144 - 28,997 38,702

25.00 100.00 256 334 - 590 1,662

100.00 100.00 - - 15,239 15,239 12,264

Total

185,744 4,179 15,239 205,162 200,093

ECL

1,451 131 6,001 7,583 6,720

Total 184,293 4,048 9,238 197,579 193,373

Receivables from customers mainly consist of unsecured loans 59.5 (59.3) per cent. The amount of the

three lowest risk categories (risk categories 6-8) in receivables decreased to 21.8 (27.2) per cent during

the ﬁnancial year. The amount of stage two and three receivables increased to 16.9 (9.9) per cent.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 41

DEBT SECURITIES

(EUR 1,000,

gross value)

PD 31 Dec 2024 31 Dec 2023

Rating Class Lower Upper Stage 1 Stage 2 Stage 3 Total Total

1-4

0.00 1.50 217,523 - - 217,523 259,051

1.50 5.00 - - - - -

5.00 25.00 - - - - -

25.00 100.00 - - - - -

100.00 100.00 - - - - -

Total

217,523 - - 217,523 259,051

ECL

25 - - 25 43

Total 217,499 - - 217,499 259,0 07

Debt securities included in the liquidity reserve fall into the four highest risk categories. Tier 2 certiﬁ-

cates are commercial papers used for liquidity management.

DOUBTFUL RECEIVABLES, FORBEARANCES AND

IMPAIRMENT LOSSES

In 2024, impairment losses recorded from loans

and receivables were EUR 3,018 thousand. Dur-

ing the ﬁnancial period the total amount of credit

losses were EUR 2,103 (1,111) thousand. Expected

credit losses (ECL) on loans and receivables and

off-balance sheet commitments increased EUR

914 thousand to EUR 8,008 (7,094) thousand dur-

ing the ﬁnancial year.

Bank’s receivables overdue for more than 90 days

accounted for 7.0 (6.5) per cent of the loan port-

folio. At the end of 2024, the Bank’s receivables

overdue for 30–90 days accounted for 1.6 (1.7)

per cent of the loan portfolio. Doubtful receiva-

bles in active collection are written off if any pay-

ments cannot be expected to the receivable on

probable grounds.

(EUR 1,000) 31 Dec 2024 31 Dec 2023

31-90 days 3,116 3,255

over 90 days 13,617 12,606

Total 16,733 15,861

OVERDUE RECEIVABLES

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 42

COUNTERPARTY DISTRIBUTION OF LIQUID ASSETS

Expected credit losses (ECL) on loans and receiv-

ables and off-balance sheet commitments in ECL

Stage 3 were EUR 6,071 (4,954) thousand. In ECL

calculation, loans with more than 90 days overdue

payments are classiﬁed to stage three. Expect-

ed credit losses and write-offs increased due to

growth in the loan portfolio and ﬁnancial difﬁcul-

ties of the retail customers affected by the wors-

ened economic situation. The amount of expect-

ed credit losses and the changes in them are pre-

sented in Note 14.

RISK CONCENTRATIONS

Credit risk concentration arises when the coun-

terparties are ﬁnancially dependent on each other

and operate in a similar operating environment, in

which case individual events can have effects on a

signiﬁcant number of counterparties at the same

time. Similar concentration risk may also arise

when similar collateral is held for credit facilities.

The total amount of credit granted by Bonum Bank

to a single customer and/or group of connected

clients is managed through amalgamation level

limits, in consideration with regulation in force.

(EUR 1,000) 31 Dec 2024 31 Dec 2023

From central banks 558,332 485,020

Governments and public bodies 83,340 105,838

Credit institutions 137,503 158,942

From companies 289 2,355

Total 779,464 752,154

LIQUIDITY RISKS

Liquidity risk refers to Bonum Bank’s ability to fulﬁl

its commitments. Liquidity risk can be divided into

short-term liquidity risk and long-term structural

ﬁnancing risk. Short-term liquidity risk refers to a

situation in which the bank cannot without difﬁ-

culty fulﬁl its liabilities to pay. Structural ﬁnancing

risk refers to a reﬁnancing risk that arises from the

difference in the maturities of balance sheet re-

ceivables and liabilities.

Managing liquidity risks

Bonum Bank’s Board of Directors approves the li-

quidity strategy and liquidity management guide-

lines prepared by the central institution at the

amalgamation level, which deﬁnes the principles,

methods, restrictions and implementation for li-

quidity management. The Board of Directors of the

central institution manages the implementation

of the amalgamation’s liquidity management, the

methods used in it and monitors the adequacy and

composition of the liquidity reserve.

Bonum Bank as the central credit institution is re-

sponsible for coordinating of the liquidity strate-

gy of the amalgamation and supervises and mon-

itors the fulﬁlment of the liquidity strategy of the

member credit institutions. The central credit in-

stitution coordinates the payment transactions of

the member credit institutions and the acquisition

and balancing of liquidity in the amalgamation. The

task of the amalgamation’s independent risk con-

trol function is to supervise and monitor the liquid-

ity risk.

Bonum Bank as the central credit institution is re-

sponsible for managing the regulatory minimum

levels of liquidity coverage ratio (LCR) and net sta-

ble funding ratio (NSFR) in the amalgamation lev-

el. The Central institution has released the mem-

ber banks from the regulatory demands of liquidity

coverage and net stable funding ratio with permis-

sion granted by the Finnish Financial Supervision

Authority. According to the permission regulatory

demands in liquidity risk have to be ﬁlled at amal-

gamation level only.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 43

The central institution’s Board of Directors ap-

proves the funding plan and the liquidity contin-

gency plan written out by the management of the

central credit institution. The central institution’s

risk monitoring function plans, develops and tests

methods used in liquidity risk management and is

responsible for risk reporting to the Board of Direc-

tors of the central institution. The central credit in-

stitution and its executive management assist the

risk control function in this process. The Board of

Directors of the central institution’s approves the

liquidity strategy and the methods used in imple-

menting the principles of liquidity management.

The central credit institution reports on the liquidi-

ty situation to the Board of Directors of the central

credit institution and is responsible for the plan-

ning of the liquidity position and funding of the

amalgamation. The Board of Directors of the cen-

tral credit institution is responsible for monitoring

the implementation of the liquidity strategy at the

central credit institution.

Liquidity risk

The liquidity management of the Bonum Bank fol-

lows the principles set out in the liquidity strate-

gy, which aims to limit risk through a diversiﬁed ﬁ-

nancial structure. The most important means of

securing liquidity position are maintaining a suf-

ﬁcient and high-quality liquidity reserve and di-

versifying funding sources. Intra-day liquidity, li-

quidity reserve and liquidity coverage ratio are

the key means to limit and measure the liquidity

risk. The internal limits and controls of the amal-

gamation limits the liquidity risk associated with

the business activities of the amalgamation and

the member credit institutions and ensure that

the regulatory requirements related to liquidity

risk are met.

The key ratios for measuring short-term liquidity

risk are the liquidity coverage ratio (LCR), speci-

ﬁed in the EU’s Capital Requirements Regulation

and The Net Stable Funding Ratio (NSFR). LCR

measures short-term liquidity risk and is respon-

sible for ensuring that the liquidity reserve, con-

sisting of high-quality liquid assets under LCR

regulation, is sufﬁcient to cover outﬂow net cash

ﬂows in stress situations for 30 days. The NSFR

measures the mismatch of assets and liabilities

on the balance sheet with maturity more than one

year and is responsible for ensuring that long-

term lending is adequately funded by long-term

funding.

LCR AND NSFR RATIO

(per cent) 31 Dec 2024 31 Dec 2023

LCR 315 274

NSFR 137 133

The liquidity reserve of the amalgamation consists

of high-quality liquid assets in accordance with

the EU Capital Requirements Regulation, which

can meet the liquidity need in stress situations ei-

ther by selling the securities or by pledging them

as collateral for central bank funding. In addition

to the assets on the central credit institutions bal-

ance sheet, the amalgamation’s liquidity reserve

also includes liquid assets in the balance sheet of

the other member credit institutions, that can be

managed by the central credit institution on the

basis of internal agreements. At the end of 2024,

the market value of non-pledged ﬁnancial assets

and cash included in the liquidity reserve were in

total of EUR 1,154 (1,032) million.

Bonum Bank supervises the intra-day liquidity

coverage by monitoring the balances of the pay-

ment accounts of the member credit institutions.

The member credit institutions follow continuously

their intra-day liquidity position.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 44

MATURITY DISTRIBUTION OF FINANCIAL LIABILITIES

(EUR 1,000)

31 Dec 2024

Under 3

months

3-12

months 1-5 years

Over 5

years Total

Deposits 14,060 - - - 14,060

Issued debt

instruments

- 14,780 169,926 - 184,706

Liabilities to credit

institutions

391,230 256,000 843,701 268,936 1,759,867

Derivatives - - 319 8,355 8,674

Lease liabilities 59 179 116 - 355

Total 405,350 270,959 1,014,062 277,291 1,967,662

Structural funding risk

The central credit institution’s business involves

funding risk arising from ﬁnancial intermediation

and the maturity transformation of lending activ-

ities. Bonum Bank acts as an internal bank of the

amalgamation, provides wholesale funding to POP

Banks, maintains a liquidity reserve and engages

in retail banking and investment activities.

The table below shows the maturities of the

Bonum Bank liabilities with interests. Instant de-

posits are assumed to mature immediately.

(EUR 1,000)

31 Dec 2023

Under 3

months

3-12

months 1-5 years

Over 5

years Total

To central banks 70,000 8,400 - - 78,400

Deposits 15,000 - - - 15,000

Issued debt

instruments

83,965 - 199,931 - 283,896

Liabilities to credit

institutions

411,611 12,700 748,399 173,662 1,346,372

Derivatives - - 1,798 - 1,798

Lease liabilities 55 208 353 - 616

Total 580,632 21,308 950,482 173,662 1,726,083

MATURITY DISTRIBUTION OF FINANCIAL LIABILITIES

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 45

At the end of the ﬁnancial year, Bonum Bank had

EUR 170 (255) million in unsecured senior loans is-

sued under the EUR 750 million bond program.

EUR 15 (29) million of the Bank’s EUR 250 million

certiﬁcates of deposits program was issued

MARKET RISKS

Market risk refers to the probability of loss result-

ing from changes in interest rates or other market

prices. The market risk classes are interest rate,

currency, equity and commodity risk.

The objective of market risk management is to

identify and assess market risks related to the

business operations, mitigate the risks to an ac-

ceptable level and timely monitoring of the risk

exposures. Within the amalgamation of POP

Banks, the central institution’s Board of Directors

conﬁrms the market risk strategy and market risk

management guidelines, which create the founda-

tion for market risk management at Bonum Bank.

Bonum Bank’s Board of Directors conﬁrm the

maximum levels for market risks and the invest-

ment policy within the investment plan according

to the market risk strategy. The capital adequacy

management process is a central process for the

measurement and monitoring of the market risks

in the balance sheet, involving capital allocation

for market risk.

In the amalgamation, market risk exposure is lim-

ited in terms of trading, interest rate risk, curren-

cy risk, derivatives, structured products and com-

modity risk. Bonum Bank does not engage in trad-

ing activities. The use of derivatives is limited to

hedging purposes only.

Currency risk is not taken at all in lending; all loans

are granted in euros. Currency risk arises to a

small extent through strategic shareholdings and

from customers foreign currency payments. Com-

modity risk is not allowed.

Interest rate risk in the banking book

The interest rate risk is the most signiﬁcant mar-

ket risk in Bonum Bank’s business operations. In-

terest rate risk refers to the effect of changes in

interest rate levels on the market value or net in-

terest income of balance sheet items and off-bal-

ance sheet items. Interest rate risk arises from dif-

ferences in the interest terms of receivables and

liabilities and mismatches in interest rate repricing

and maturity dates. Interest rate risk arises from

the liquidity reserve investment activities and the

banking book operations.

Bonum Bank monitors the interest rate risk by

with present value method and dynamic income

risk model on a monthly basis. The present value

method measures how changes in interest rates

change the constructed market value of the bal-

ance sheet. In the present value method, the mar-

ket value of the balance sheet is calculated as

the present value of the expected cash ﬂows of

individual balance sheet items. Interest rate sen-

sitivity indicators are primarily used to monitor

the market value changes caused by the chang-

es in the interest rates and credit spreads of in-

vestment items in different interest rate scenari-

os. The income risk model predicts the future net

interest income and its changes in various market

rate scenarios within a time frame of ﬁve years.

The amount of interest rate risk taken is assessed

with the effect of diverse interest rate shocks on

the net interest income and net present value. The

effect of early loan prepayments and the behav-

iour of non-maturity deposits have been consid-

ered in the analysis.

The objective of interest rate management is

to stabilise the interest rate risk involved in the

bank’s balance sheet to a level at which business

is proﬁtable, but proﬁt or capital adequacy are not

threatened even in considerable changes of the

interest rate environment.

Interest rate risk is managed primarily by planning

the balance sheet structure, such as the inter-

est rate ﬁxing or maturity of assets and liabilities.

During the ﬁnancial period, Bonum Bank executed

derivative hedges to decrease interest rate risk in

member banks’ banking book. Details of the deriv-

ative hedges are presented in Note 23.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 46

Impact to interest margin

31 Dec 2024 31 Dec 2023

(EUR 1,000) Change 1-12 mo. 1-12 mo.

Interest rate risk

+2%-point -1,504 -1,124

Interest rate risk -2%-point 1,367 1,136

THE INTEREST RATE SENSITIVITY ANALYSIS OF THE BANKING BOOK

The impact of the interest rate risk on operating

income has been calculated as a change to the

12-month forecast of the net interest income, as-

suming two percentage point upward or downward

parallel interest rate level shift.

Investment and liquidity portfolio

The investment and liquidity portfolio of the cen-

tral credit institution consists of liquid securities

and other investments included in the banks’ bal-

ance sheet. Market risk emerges in these invest-

ment activities, consisting mainly of counterpar-

ty and interest rate risks. The objective in invest-

ing activities is to obtain a competitive return on

investment in terms of yield/risk ratio on a long-

term perspective.

Risks arising from the investment and liquidi-

ty portfolio are managed by limits deﬁned by the

amalgamation, which ensures the diversiﬁcation

of investments in terms of timing, asset catego-

ry, risk type and counterparty. Investment risks

are also monitored through sensitivity analysis.

The purpose of the limitation is that the effect of

changes in interest rates or share prices on proﬁt

will not threaten the capital adequacy or proﬁta-

bility of the bank or the entire amalgamation.

Risk appetite in the investment portfolio is as-

sessed in relation to the earnings and own funds.

The breakdown of investment assets is described

in Note 17 Investment Assets.

OPERATIONAL RISKS

Operational risks refer to ﬁnancial losses or oth-

er harmful consequences to business that may

be caused by internal inadequacies or errors in

systems, processes, procedures and the actions

of personnel, or by external factors affecting the

business. All main and support business process-

es, including outsourced processes, involve opera-

tional risks.

The objective of the management of operation-

al risks is to identify essential operational risks

in business operations and minimise their mate-

rialisation and impact. The objective is pursued

through operational risk management process-

es, internal guidelines, process controls, continu-

ous personnel training and internal control meas-

ures. The Bank’s Board of Directors approves the

guidelines on operational risk management and

the principles of continuity planning as binding in-

structions given by the central institution.

The most important operational risk management

processes are operative risk self-assessment pro-

cess, continuous evaluation of realized operative

incidents and near-miss events and new product

/service approval procedure. All these incorporate

recognition and evaluation of essential risks in

business processes and planning of measures to

mitigate the risks. Targeted operational risk level

of the amalgamation is moderate. Capital is allo-

cated to operational risks in the capital adequacy

management process.

The Banks’ Risk Control unit reports signiﬁcant

operative risk events, incidents and risk assess-

ment results to the board as well as to the central

institutions risk management function. The Banks’

executive management monitors operational risk

events and incidents regularly, to assess the risk

involved and take timely mitigating actions if nec-

essary.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 47

STRATEGIC RISK

Strategic risk refers to losses caused by choosing

wrong strategy or business model in relation to the

development of the bank’s operating environment.

The losses may also be caused by unsuccessful

implementation of strategy, unexpected changes

in the competitive environment or responding too

slowly to changes.

Bonum Bank aims to minimise strategic risks by

means of regular updates of its strategic and an-

nual plans. Analyses of the condition and develop-

ment of the POP Bank Group business activities,

as well as other analyses and estimates concern-

ing the development of the sector, competition

and ﬁnancial operating environment are utilized in

the planning.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 48

NOTE 3 INTEREST INCOME AND EXPENSES

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Interest income

Loans and advances to credit institutions 50,420 44,038

Loans and advances to customers 16,750 14,683

Debt securities

At amortised cost 4,679 2,539

At fair value through proﬁt or loss 2,640 3,934

Other interest income 1 1

Total interest income 74,491 65,195

Interest expenses

Liabilities to credit institutions -46,323 -37,172

Liabilities to customers

-331 -491

Debt securities issued to the public -11,538 -11,673

Hedging derivatives* -6,045 -2,784

Other interest expenses -20 -76

Total interest expenses -64,257 -52,196

of which negative interest income -7 -7

Net interest income 10,233 12,999

*The presentation method for interest income from derivative contracts has been changed. For the in-

terest on derivatives, the interest from one interest rate swap will henceforth be recorded on a net basis

rather than as gross interest income and gross interest expense. A reclassiﬁcation of EUR 9,469,3 thou-

sand from interest income to interest expenses was made for the comparative period. The change is de-

scribed in more detail in Note 1, under Changes in presentation method.

Income and expense by measurement category is presented in Note 11.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 49

NOTE 4 NET COMMISSIONS AND FEES

NOTE 5 NET INVESTMENT INCOME

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Commissions and fees

Lending 1,267 988

Card business 5,173 4,964

Payment transfers 4,215 4,130

Other commission income 15 0

Total commissions and fees 10,670 10,082

Commissions expenses

Card business -1,653 -1,932

Payment transfers -875 -819

Other commission expenses -117 -105

Total commission expenses -2,645 -2,856

Net commissions and fees 8,024 7,226

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

At fair value through other comprehensive income

Debt securities

Capital gains and losses 4 -

Transferred from fair value reserve to the income

statement

-5 -

Shares and participations

Dividend income* 8 7

Total 7 7

Net income from foreign exchange trading 191 169

Net income from hedge accounting

Change in hedging instruments' fair value 6,298 13,398

Change in hedged items' fair value -5,930 -14,343

Total 368 -945

Total net investment income 566 -769

*Dividend income from equity shares measured at fair value through other comprehensive income held

int the end of the ﬁnancial period is EUR 8 (7) thousand.

Net investment income includes net income from ﬁnancial instruments except interest income from

debt securities recognised in net interest income.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 50

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Central credit institution services excl. payment

transfer

56 57

Other income 6,395 5,109

Total other operating income 6,451 5,167

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Wages and salaries -5,712 -4,441

Indirect personnel expenses -156 -186

Pension costs

Deﬁned contribution plans -997 -783

Total personnel expenses -6,864 -5,409

NOTE 6 OTHER OPERATING INCOME

NOTE 7 PERSONNEL EXPENSES

The “Other income” item includes mainly intra-group charges and service fees.

On 31 December 2024, the bank had 102 (88) employees. On average, during year 2024, the bank had 95

(81) employees.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 51

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Other operating expenses

Other personnel expenses -558 -401

Ofﬁce expenses -2,582 -2,026

ICT expenses -6,997 -8,109

Telecommunications -492 -422

Entertainment and marketing expenses -124 -101

Other administrative expenses total -10,753 -11,058

Other operating expenses

Rental expenses -238 -145

Audit fees -60 -33

Other operating expenses* -2,893 -746

Other operating expenses total -3,190 -923

Total other operating expenses -13,943 -11,982

Audit fees

Audit services -60 -33

Total audit fees -60 -33

NOTE 8 OTHER OPERATING EXPENSES

Other than audit services from KPMG Oy Ab totalled to EUR 0 (0) thousand during the ﬁnancial year

2024.

Expenses from items covered by exemptions providing practical relief are presented in the rental ex-

penses and expenses from owner-occupied properties.

*) Other operating expenses include EUR 2,123 thousand one-off expenses of selling consumer loans

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Machinery and equipment -19 -18

Right of use assets -165 -165

Intangible assets -221 -729

Total depreciation, amortisation and impairment

-473 -911

NOTE 9 DEPRECIATION, AMORTISATION AND IMPAIRMENT

More detailed information about right off use assets is provided in Note 29.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 52

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Current tax -178 -617

Tax for prior ﬁnancial years -1 -9

Withholding tax paid outside Finland -2 -2

Change in deferred tax assets -12 20

Total income tax expense

-194 -609

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Proﬁt before tax 978 3,015

Income tax rate 20 % 20 %

Tax calculated at the tax rate -196 -603

Tax-free income, incomestatement 3 4

Tax for prior ﬁnancial years -1 -9

Tax expense in the income statement

-194 -609

RECONCILIATION BETWEEN TAX EXPENSE IN THE INCOME STATEMENT AND TAX EXPENSE

CALCULATED USING THE APPLICABLE TAX RATE

NOTE 10 INCOME TAX

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 53

(EUR 1,000)

Financial assets 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

At fair value through other comprehensive income

Interest income ja expenses 2,573 3,878

Transferred from fair value reserve -5 -

Dividend income 8 7

Capital gains and losses 4 -

Expected credit loss 10 6

Total 2,589 3,891

At amortised cost

Interest income ja expenses 25,244 23,578

Other income 3,174 2,807

Expected credit loss -943 -2,170

Total

27,475 24,215

Financial liabilities 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

At amortised cost

Interest income ja expenses -11,538 -11,673

Total -11,538 -11,673

At fair value through proﬁt or loss

Hedging derivatives

Fair value gains and losses 372 -944

Interest income and expenses -6,045 -2,784

Total -5,673 -3,728

Net income from foreign exchange operation 191 169

Total

13,044 12,874

NOTE 11 NET INCOME AND EXPENSES OF FINANCIAL ASSETS AND

FINANCIAL LIABILITIES BY MEASUREMENT CATEGORY

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 54

NOTE 12 CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL

LIABILITIES

FINANCIAL ASSETS 31 DEC 2024

(EUR 1,000)

At amortised

cost

At fair value

through profit

or loss

At fair value

through other

comprehensive

income

Expected

credit loss

Total carrying

amount

Liquid assets 558,332 - - - 558,332

Loans and advances to

credit institutions

1,020,697 - - - 1,020,697

Loans and advances to

customers

205,162 - - -7,583 197,579

Derivatives - 22,395 - - 22,395

Debt securities* 148,768 - 68,741 -10 217,499

Shares and

participations

- - 1,191 - 1,191

Financial assets total 1,932,959 22,395 69,931 -7,594 2,017,691

Other assets 32,818

Total assets 2,050,510

FINANCIAL ASSETS 31 DEC 2023

(EUR 1,000)

At amortised

cost

At fair value

through profit

or loss

At fair value

through other

comprehensive

income

Expected

credit loss

Total carrying

amount

Liquid assets 485,020 - - - 485,020

Loans and advances to

credit institutions

849,550 - - -1 849,549

Loans and advances to

customers

200,093 - - -6,720 193,373

Derivatives - 9,220 - - 9,220

Debt securities* 144,655 - 114,368 -16 259,007

Shares and

participations

- - 956 - 956

Financial assets total 1,679,317 9,220 115,324 -6,736 1,797,126

Other assets 40,493

Total assets 1,837,618

* Expected credit loss of EUR 15 (25) thousand from debt securities have been recorded in the fair value

reserve.

* Expected credit loss of EUR 25 thousand from debt securities have been recorded in the fair value re-

serve.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 55

FINANCIAL LIABILITIES 31 DEC 2024

(EUR 1,000)

At fair value through

other comprehensive

income

At amortised

cost

Total

carrying

amount

Liabilities to credit institutions - 1,759,867 1,759,867

Liabilities to customers - 14,060 14,060

Derivatives 8,674 - 8,674

Debt securities issued to the public - 184,706 184,706

Financial liabilities total 8,674 1,958,633 1 ,967,307

Other liabilities 32,195

Total liabilities 1,999,503

FINANCIAL LIABILITIES 31 DEC 2023

(EUR 1,000)

At fair value through

other comprehensive

income

At amortised

cost

Total

carrying

amount

Liabilities to credit institutions - 1,424,772 1,424,772

Liabilities to customers - 33,435 33,435

Derivatives 1,798 - 1,798

Debt securities issued to the public - 283,896 283,896

Financial liabilities total 1,798 1,742,104 1,743,902

Other liabilities 43,173

Total liabilities 1,787,075

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 56

NOTE 13 CLASSIFICATION OF FINANCIAL ASSETS AND FINANCIAL

LIABILITIES AND FAIR VALUES BY VALUATION TECHNIQUE

31 Dec 2024 31 Dec 2023

(EUR 1,000)

Carrying amount

Fair value

Carrying amount

Fair value

Liquid assets 558,332 558,332 485,020 485,020

Loans and advances to

credit institutions

1,020,697 1,025,264 849,549 849,549

Loans and advances to

customers

197,579 196,849 193,373 191,872

Investment assets 22,395 22,395 9,220 9,220

At amortised cost

At fair value through

proﬁt or loss

148,758 147,546 144,639 147,546

To ta l

69,931 69,931 115,324 115,324

Total 2,017,691 2,020,316 1,797,126 1,798,530

FINANCIAL ASSETS

31 Dec 2024 31 Dec 2023

(EUR 1,000)

Carrying amount

Fair value

Carrying amount

Fair value

Liabilities to credit

institutions

1,759,867 1,759,768 1,424,772 1,424,750

Liabilities to customers

14,060 14,060 33,435 33,435

Derivatives 184,706 185,182 283,896 280,693

Debt securities issued to

the public

8,674 8,674 1,798 1,798

Total 1 ,967, 3 07 1,967,685 1,743,902 1,740,676

FINANCIAL LIABILITIES

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 57

ASSETS RECURRENTLY MEASURED AT FAIR VALUE 31 DEC 2023

(EUR 1,000) Level 1 Level 2 Level 3 Total fair value

At fair value through other comprehensive

income

Derivatives - 9,220 - 9,220

At fair value through other comprehensive

income

Shares and participations - - 956 956

Debt securities 80,549 33,819 - 114,368

Total 80,549 43,039 956 124,545

LIABILITIES RECURRENTLY MEASURED AT FAIR VALUE 31 DEC 2023

(EUR 1,000) Level 1 Level 2 Level 3 Total fair value

At fair value through proﬁt or loss

Derivatives - 8,674 - 8,674

Total ﬁnancial liabilities - 8,674 - 8,674

LIABILITIES RECURRENTLY MEASURED AT FAIR VALUE 31 DEC 2024

(EUR 1,000) Level 1 Level 2 Level 3 Total fair value

At fair value through proﬁt or loss

Derivatives - 1,798 - 1,798

Total ﬁnancial liabilities - 1,798 - 1,798

ASSETS RECURRENTLY MEASURED AT FAIR VALUE 31 DEC 2024

(EUR 1,000) Level 1 Level 2 Level 3 Total fair value

At fair value through other comprehensive

income

Derivatives - 22,395 - 22,395

At fair value through other comprehensive

income

Shares and participations - - 1,191 1,191

Debt securities 58,773 9,968 - 68,741

Total 58,773 32,363 1,191 92,326

FAIR VALUE HIERARCHY LEVELS OF ITEMS RECURRENTLY RECOGNISED AT FAIR VALUE

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 58

ASSETS MEASURED AT AMORTISED COST 31 DEC 2024

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Loans and advances to

credit institutions

- 1,020,697 - 1,025,264 1,020,697

Loans and advances to

customers

- 197,579 - 196,849 197,579

Debt securities - 148,758 - 147,546 148,758

Total - 1,367,034 - 1,369,659 1,367,034

ASSETS MEASURED AT AMORTISED COST 31 DEC2023

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Loans and advances to

credit institutions

- 849,549 - 849,549 849,549

Loans and advances to

customers

- 193,373 - 191,872 193,373

Debt securities - 144,639 - 147,546 144,639

Total - 1,187,562 - 1,188,966 1,187,562

LIABILITIES MEASURED AT AMORTISED COST 31 DEC 2024

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Liabilities to credit

institutions

- 1,759,867 - 1,759,768 1,759,867

Liabilities to customers - 14,060 - 14,060 14,060

Debt securities issued

to the public

- 184,706 - 185,182 184,706

Total - 1,958,633 - 1,959,011 1,958,633

LIABILITIES MEASURED AT AMORTISED COST 31 DEC 2023

(EUR 1,000) Level 1 Level 2 Level 3

Total fair

value

Carrying

amount

Liabilities to credit

institutions

- 1,424,772 - 1,424,750 1,424,772

Liabilities to customers - 33,435 - 33,435 33,435

Debt securities issued

to the public

- 283,896 - 280,693 283,896

Total - 1,742,104 - 1,738,878 1,742,104

FAIR VALUE HIERARCHY LEVELS OF ITEMS RECOGNIZED AT AMORTISED COST

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 59

FAIR VALUE DETERMINATION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Financial assets are recorded in the balance sheet either at fair value or at amortised cost. The classi-

ﬁcation and measurement of ﬁnancial instruments is described in more detail in Note 1 Bonum Bank’s

Accounting policies.

FAIR VALUE HIERARCHIES

Level 1 includes ﬁnancial instruments that are measured on the basis of quotations obtained from liquid

markets. A market is considered as liquid if quotations are regularly available. This group included all se-

curities with publicly quoted prices. .

Level 2 includes ﬁnancial instruments measures using generally approved measurement techniques or

models which are based on assumptions made on the basis of observable market prices. For example,

the fair value of a ﬁnancial instrument allocated to Level 2 may be based on the value derived from the

market quotation of components of an instrument. This group includes interest derivatives and other in-

struments that are not traded in liquid markets.

Level 3 includes ﬁnancial instruments and other assets and liabilities that are not measured using mar-

ket quotations or values determined on the basis of observable market prices using measurement tech-

niques or models. The assumptions applied in the measurement techniques often involve insecurity. The

fair value of assets allocated to Level 3 is often based on price information obtained from a third party.

This group includes unlisted shares and funds and investment properties.

TRANSFERS BETWEEN FAIR VALUE HIERARCHIES

Transfers between hierarchy levels are considered to have taken place on the date of the occurrence of

the event that caused the transfer or the date when the circumstances changed.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 60

CHANGES IN FINANCIAL ASSETS RECURRENTLY MEASURED AT FAIR

VALUE CLASSIFIED INTO LEVEL 3

(EUR 1,000)

At fair value

through other

comprehensive

income Total

Carrying amount 1 Jan 2024 956 956

Changes in value recognised in other comprehensive

income

234 234

Carrying amount 31 Dec 2024 1,191 1,191

(EUR 1,000)

At fair value

through other

comprehensive

income Total

Carrying amount 1 Jan 2023 815 815

Changes in value recognised in other comprehensive

income

141 141

Carrying amount 31 Dec 2023 956 956

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 61

SENSITIVITY ANALYSIS OF FINANCIAL ASSETS AT LEVEL 3

31 DEC 2024

Possible effect on equity capital

(EUR 1,000) Carrying amount Positive Negative

At fair value through other

comprehensive income

1,191 179 -179

Total 1,191 179 -179

Possible effect on equity capital

(EUR 1,000) Carrying amount Positive Negative

At fair value through other

comprehensive income

956 143 -143

Total 956 143 -143

The sensitivity of ﬁnancial assets recurrently measured at fair value at level 3 has been calculated for

interest rate linked investments by assuming a 1 percentage points change in interest rates and for oth-

er investments by assuming the market price of the security to change by 15%.

Bonum Bank Plc does not have assets measured non-recurrently at fair value.

31 DEC 2023

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 62

NOTE 14 IMPAIRMENT LOSSES ON FINANCIAL ASSETS

IMPAIRMENT LOSSES RECORDED DURING THE REPORTING PERIOD

(1 000 euroa)

1 Jan - 31 Dec

2024

1 Jan - 31 Dec

2023

Change of ECL due to write-offs 3,658 568

Change of ECL, receivables from customers and off-

balance sheet items

-4,601 -2,738

Change of ECL, debt securities 29 -25

Final credit losses -2,103 -1,111

Impairment losses on ﬁnancial assets total -3,018 -3,306

During the ﬁnancial year, EUR -2,103 (-1,111) thousand was recognised as ﬁnal credit loss. Recollection

measures are attributed to the whole amount of credit losses.

Changes in expected credit loss (ECL) during the ﬁnancial period are presented in the tables below. Stage

1 represents ﬁnancial instruments whose credit risk has not increased signiﬁcantly since the initial rec-

ognition. Expected credit losses are determined for such ﬁnancial instruments based on expected loan

losses for 12 months. Stage 2 represents ﬁnancial instruments whose credit risk has increased signiﬁ-

cantly after the initial recognition on the basis of qualitative or quantitative criteria and, for stage 3, ﬁ-

nancial instruments whose counterparty has been declared as default. Expected credit losses are deter-

mined for ﬁnancial instruments classiﬁed in Stage 2 and 3 based on the expected credit losses over the

entire life of the instrument.

The principles for calculating expected credit losses and determining the probability of default are pre-

sented in IFRS ﬁnancial statements of the Bonum Bank on 31 December 2024, Note 1 Accounting policies.

RECEIVABLES FROM CUSTOMERS

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2024

1,667 168 4,884 6,720

Transfers to stage 1 10 -30 -251 -271

Transfers to stage 2 -48 54 -41 -35

Transfers to stage 3 -185 -58 3,268 3,025

Increases due to origination 625 62 774 1,461

Decreases due to derecognition -458 -64 -2,637 -3,159

Changes due to change in credit risk (net) -160 -2 3,663 3,501

Decreases due to write-offs

- - -3,658 -3,658

Total -216 -37 1,117 863

ECL 31 Dec 2024 1,451 131 6,001 7,583

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 63

OFF-BALANCE SHEET COMMITMENTS

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2024 194 42 70 306

Transfers to stage 1 7 -30 -31 -53

Transfers to stage 2 -1 8 -1 5

Transfers to stage 3 -1 -1 15 13

Increases due to origination 84 18 25 126

Decreases due to derecognition -4 -1 -1 -6

Changes due to change in credit risk (net) 4 -4 -6 -5

Total 90 -11 0 80

ECL 31 Dec 2024 284 31 70 386

RECEIVABLES FROM CREDIT INSTITUTIONS

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2024

- 1 - 1

Changes due to change in credit risk (net) - -1 - -1

Total - -1 - -1

ECL 31 Dec 2024 - 0 - 0

ECL 1 Jan 2024 1 ,929 211 4,954 7,094

ECL 31 Dec 2024 1,775 162 6,071 8,008

DEBT SECURITIES

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2024 68 - - 68

Increases due to origination

5 - - 5

Decreases due to derecognition

-10 - - -10

Changes due to change in credit risk (net) -24 - - -24

Total -28 - - -29

ECL 31 Dec 2024 40 - - 39

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 64

RECEIVABLES FROM CUSTOMERS

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2023

1,549 213 2,816 4,578

Transfers to stage 1 47 -57 -369 -379

Transfers to stage 2 -163 70 -129 -222

Transfers to stage 3 -159 -57 2,172 1,956

Increases due to origination 769 65 952 1,786

Decreases due to derecognition -305 -43 -599 -948

Changes due to change in credit risk (net) -70 -22 608 516

Decreases due to write-offs

- - -568 -568

Total 118 -44 2,068 2,141

ECL 31 Dec 2023 1,667 168 4,884 6,720

OFF-BALANCE SHEET COMMITMENTS

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2023 172 39 67 277

Transfers to stage 1 3 -20 -35 -52

Transfers to stage 2 -3 13 -1 10

Transfers to stage 3 -1 -1 16 14

Increases due to origination 39 20 19 78

Decreases due to derecognition -1 - -1 -1

Changes due to change in credit risk (net) -15 -8 5 -19

Total 22 3 3 29

ECL 31 Dec 2023 194 42 70 306

DEBT SECURITIES

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2023 43 - - 43

Increases due to origination

46 - - 46

Decreases due to derecognition

-9 - - -9

Changes due to change in credit risk (net) -12 - - -12

Total 25 - - 25

ECL 31 Dec 2023 68 - - 68

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 65

CREDIT RISK BY STAGES 31 DEC 2024

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

Receivables from customers

Private 149,277 3,939 15,168 168,384

Corporate 36,467 240 71 36,779

Receivables from customers total 185,744 4,179 15,239 205,162

ECL 31 Dec 2024 1,451 131 6,001 7,583

Coverage ratio 0.8% 3.1% 39.4% 3.7%

Off-balance sheet commitments

Private 176,418 967 472 177,857

Corporate 7,252 41 22 7,315

Off-balance sheet commitments total 183,669 1,008 495 185,172

ECL 31 Dec 2024 284 31 70 386

Coverage ratio 0.2% 3.1% 14.2% 0.2%

Debt securities

ECL 31 Dec 2024 40 - - 39

Coverage ratio 0.0% 0.0% 0.0% 0.0%

Receivables from credit institutions 570,000 - - 570,000

ECL 31 Dec 2024 - - - -

Coverage ratio 0.0% 0.0% 0.0% 0.0%

Credit risk by stages total 1,156,937 5,187 15,734 1,177,858

The table above summarizes the exposure to credit risk and the amount of the expected credit loss in re-

lation to the amount of the exposure in stages. The coverage ratio illustrates the relative share of the ECL

in the amount of exposure. There were no signiﬁcant changes in the coverage ratio during the period.

RECEIVABLES FROM CREDIT INSTITUTIONS

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

ECL 1 Jan 2023

1 0 - 1

Changes due to change in credit risk (net) -1 1 - 0

Total -1 1 - 0

ECL 31 Dec 2023 0 1 - 1

ECL 1 Jan 2023 1,765 251 2,883 4,899

ECL 31 Dec 2023 1,929 211 4,954 7,094

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 66

CREDIT RISK BY STAGES 31 DEC 2023

(EUR 1,000) Stage 1 Stage 2 Stage 3 Total

Receivables from customers

Private 143,138 6,678 12,144 161,960

Corporate 37,891 122 120 38,133

Receivables from customers total 181,029 6,800 12,264 200,093

ECL 31 Dec 2023 1,667 168 4,884 6,720

Coverage ratio 0.9% 2.5% 39.8% 3.4%

Off-balance sheet commitments

Private 160,317 2,082 380 162,779

Corporate 8,657 82 15 8,754

Off-balance sheet commitments total 168,974 2,164 396 171,533

ECL 31 Dec 2023 194 42 70 306

Coverage ratio 0.1% 1.9% 17.6% 0.2%

Debt securities 258,757 293 - 259,051

ECL 31 Dec 2023 68 - - 68

Coverage ratio 0.0% 0.0% 0.0% 0.0%

Receivables from credit institutions 405,000 - - 405,000

ECL 31 Dec 2023 - - - -

Coverage ratio 0.0% 0.0% 0.0% 0.0%

Credit risk by stages total 1,013,760 9, 257 12,660 1,035,677

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 67

NOTE 15 LIQUID ASSETS

NOTE 16 LOANS AND ADVANCES

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Receivables from central banks repayable on demand 558,332 485,020

Total cash and cash equivalents 558,332 485,020

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Loans and advances to credit institutions

Deposits

Repayable on demand 450,697 444,549

Other 570,000 405,000

Total loans and advances to credit institutions 1,020,697 849,549

Loans and advances to customers

Loans 140,898 135,530

Credit card receivables 56,656 57,823

Other receivables 26 20

Total loans and advances to customers 197,579 193,373

Total loans and advances 1,218,276 1 ,042,922

Cash and cash equivalents include cheque account with the Bank of Finland.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 68

NOTE 17 INVESTMENTS ASSETS

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Measured at amortised cost

Debt securities 148,758 144,639

At fair value through other comprehensive income

Debt securities 68,741 114,368

Shares and participations 1,191 956

Investment assets total 218,689 259,96 3

(EUR 1,000)

At amortised cost

At fair value through other

comprehensive income

Debt securities Debt securities

Shares and

participations Total

Quoted

Public sector

entities

- 16,911 - 16,911

Other 148,758 51,830 - 200,588

Other

Other 1,191 1,191

Total investments 148,758 68,741 1,191 218,689

INVESTMENTS 31 DEC 2024

INVESTMENTS 31 DEC 2023

(EUR 1,000)

At amortised cost

At fair value through other

comprehensive income

Debt securities Debt securities

Shares and

participations Total

Quoted

Public sector

entities

- 24,309 - 24,309

Other 144,639 60,174 - 204,814

Other

Public sector

entities

- 29,885 - 29,885

Other - - 956 956

Total investments 144,369 114,368 956 259,963

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 69

NOTE 18 INTANGIBLE ASSETS

Bonum Bank’s intangible assets are information systems over which Bonum Bank has control as referred

to in IAS 38 Intangible assets. The information systems are implemented by POP Bank Group’s partners

of which the most important is Samlink Ltd.

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Information systems 108 329

Total intangible assets 108 329

(EUR 1,000) IT systems

Other long-

term ex-

penditures Total

Acquisition cost 1 Jan 6,431 20 6,451

Acquisition cost 31 Dec 6,431 20 6,451

Accumulated amortisation and

impairments 1 Jan

-6,102 -20 -6,122

Amortisation -221 - -221

Accumulated amortisation and

impairments 31 Dec

-6,323 -20 -6,343

Carrying amount 1 Jan 329 0 329

Carrying amount 31 Dec 108 0 108

CHANGES IN INTANGIBLE ASSETS 2024

(EUR 1,000) IT systems

Other long-

term ex-

penditures Total

Acquisition cost 1 Jan 6,431 20 6,451

Acquisition cost 31 Dec 6,431 20 6,451

Accumulated amortisation and

impairments 1 Jan

-5,374 -20 -5,394

Amortisation -729 - -729

Accumulated amortisation and

impairments 31 Dec

-6.102 -20 -6,122

Carrying amount 1 Jan 1,057 0 1,057

Carrying amount 31 Dec 329 0 329

CHANGES IN INTANGIBLE ASSETS 2023

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 70

NOTE 19 PROPERTY, PLANT AND EQUIPMENT

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Machinery and equipment 25 38

Right-of-use assets 345 610

Total property, plant and equipment 370 648

(EUR 1,000)

Right-of-use

items

Machinery and

equipment

Total

Acquisition cost 1 Jan 1,318 216 1,535

Increases - 5 5

Decreases -32 - -32

Acquisition cost 31 Dec 1,287 222 1,540

Accumulated depreciation and

impairment 1 Jan

-708 -178 -886

Depreciation -234 -19 -252

Accumulated depreciation and

impairment 31 Dec

-942 -197 -1,318

Carrying amount 1 Jan 610 38 648

Carrying amount 31 Dec 345 25 370

CHANGES IN PROPERTY, PLANT AND EQUIPMENT 2024

An itemisation of ﬁxed asset items is provided in Note 29.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 71

(EUR 1,000)

Right-of-use

items

Machinery

and equip-

ment Total

Acquisition cost 1 Jan 867 195 1,062

Increases 451 21 472

Acquisition cost 31 Dec 1,318 216 1,535

Accumulated depreciation and

impairment 1 Jan

-543 -160 -704

Depreciation -165 -18 -183

Accumulated depreciation and

impairment 31 Dec

-708 -178 -886

Carrying amount 1 Jan 324 35 359

Carrying amount 31 Dec 610 38 648

CHANGES IN PROPERTY, PLANT AND EQUIPMENT 2023

NOTE 20 OTHER ASSETS

NOTE 21 DEFERRED TAXES

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Accrued income and prepaid expenses

Interest 16,938 20,303

Other accrued income and prepaid expenses 6,754 4,001

Other assets 8,301 15,005

Total other assets 31,992 39,309

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Tax assets

Deferred tax assets 102 207

Income tax receivables 245 -

Total tax assets 347 207

Tax liabilities

Deferred tax liabilities 257 186

Income tax liabilities - 17

Total tax liabilities 257 203

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 72

(EUR 1,000) 1 Jan 2024

Recognised

through profit

or loss

Recognised

in other com-

prehensive

income

31 Dec 2024

At fair value through other

comprehensive income

186 - -93 93

Deferred tax assets on losses 21 -12 - 9

Deferred tax assets total 207 -12 -93 102

(EUR 1,000) 1 Jan 2024

Recognised

in other com-

prehensive

income

31 Dec 2024

At fair value through other comprehensive

income

172 71 244

Intangible assets 13 - 13

Deferred tax liabilities total 186 71 257

(EUR 1,000) 1 Jan 2023

Recognised

in other

comprehensive

income 31 Dec 2023

At fair value through other comprehensive

income

131 42 172

Intangible assets

13 - 13

Deferred tax liabilities total 144 42 186

(EUR 1,000) 1 Jan 2023

Recognised

through profit

or loss

Recognised

in other com-

prehensive

income

31 Dec 2023

At fair value through other

comprehensive income

514 - -329 186

Deferred tax assets on losses 1 20 - 21

Deferred tax assets total 515 20 -329 207

DEFERRED TAX ASSETS

DEFERRED TAX LIABILITIES

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 73

(EUR 1,000) Gross change

Deferred tax

Net change

Fair value reserve 820 -164 656

Amounts recognised in other

comprehensive income, total

820 -164 656

(EUR 1,000) Gross change

Deferred tax

Net change

Fair value reserve 1,851 -370 1,481

Amounts recognised in other

comprehensive income, total

1,851 -370 1,481

AMOUNTS RECOGNISED IN OTHER COMPREHENSIVE INCOME AND RELATED DEFERRED

TAXES 2024

AMOUNTS RECOGNISED IN OTHER COMPREHENSIVE INCOME AND RELATED DEFERRED

TAXES 2023

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 74

NOTE 22 LIABILITIES TO CREDIT INSTITUTIONS AND CUSTOMERS

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Liabilities to credit institutions

To central banks - 78,400

To other credit institutions

Repayable on demand 321,365 347,519

Not repayable on demand 1,438,502 998,853

Total liabilities to credit institutions 1,759,867 1,424,772

Liabilities to customers

Deposits

Repayable on demand 14,060 33,435

Total liabilities to customers 14,060 33,435

Total liabilities to credit institutions and customers 1,773,927 1,458,207

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 75

NOTE 23 DERIVATIVE CONTRACTS AND HEDGE ACCOUNTING

Bonum Bank uses interest rate swap agreements for interest rate hedging and hedge accounting for

fair value hedging. The hedged instruments have ﬁxed interest rate. The nominal value of the fair value

hedged instruments at the end of the reporting period was EUR 724,000 thousand. This item is included

in ”Loans and advances to credit institutions”. The nominal values of the derivative contracts match with

the nominal values of the hedged instruments.

(EUR 1,000)

Fair value 31 Dec 2024 Fair value 31 Dec 2023

Assets Liabilities Assets Liabilities

Derivatives

Fair value hedging 14,771 1,050 9,220 1,798

Non hedging derivatives - interest

rate options

6,623 6,625 - -

Non hedging derivatives - interest

rate swaps

1,000 999 - -

Derivatives total 22,395 8,674 9, 220 1,798

(EUR 1,000)

Interest rate risk 31 Dec 2024 Interest rate risk 31 Dec 2023

Carrying amount

of hedged

liabilities

Of which

accumulated

amount of fair

value hedge

adjustment

Carrying amount

of hedged

liabilities

Of which

accumulated

amount of fair

value hedge

adjustment

Micro hedge

Hedged deposits* 724,900 14,099 624,900 8,169

Liabilities 724,900 14,099 624,900 8,169

DERIVATIVES AND HEDGED ITEMS COVERED BY HEDGE ACCOUNTING

HEDGE ACCOUNTING

HEDGING INTEREST RATE DERIVATIVES

EFFECTS OF HEDGE ACCOUNTING ON FINANCIAL POSITION AND RESULT

FAIR VALUE HEDGE

*Hedged deposits are included in ‘Loans and advances to credit institutions’

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 76

Interest rate risk

Fair value hedging

1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Change in the fair value of the derivative

contract

6,298 13,398

Change in the fair value of the hedged item -5,930 -14,343

Hedge ineffectiveness recognized in the

income statement

368 -945

PROFITS AND LOSSES FROM HEDGE ACCOUNTING AND HEDGE INEFFECTIVENESS

MATURITY PROFILE OF THE NOMINAL AMOUNT OF HEDGING INTEREST RATE RISK

31 DEC 2024

Nominal value / Remaining maturity

(EUR 1,000) 1-5 years

More than

5 years Total

Instruments hedging interest

rate risk

524,900 200,000 724,900

31 DEC 2023

Nominal value / Remaining maturity

(EUR 1,000) 1-5 years

More than

5 years Total

Instruments hedging interest

rate risk

524,900 100,000 624,900

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 77

OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES

31 DEC 2024

Amounts which are not offset

but are subject to enforceable

master netting arrangements

or similar agreements

(EUR 1,000)

Recognised fi-

nancial assets,

gross

Carrying

amount in

balance sheet,

net

Enforceable

master

netting

arrangement

Cash

held as

collateral*)

Net amount

Assets

Derivatives 28,235 28,235 -3,133 -24,740 362

Total 28,235 28,235 -3,133 -24,740 362

Liabilities

Derivatives 8,998 8,998 -3,133 - 5,865

Total 8,998 8,998 -3,133 - 5,865

31 DEC 2023

Amounts which are not offset

but are subject to enforceable

master netting arrangements

or similar agreements

(EUR 1,000)

Recognised fi-

nancial assets,

gross

Carrying

amount in

balance sheet,

net

Enforceable

master

netting

arrangement

Cash

held as

collateral*)

Net amount

Assets

Derivatives 16,575 16,575 -6,104 -10,471 0

Total 16,575 16,575 -6,104 -10,471 0

Liabilities

Derivatives 6,104 6,104 -6,104 - 0

Total 6,104 6,104 6,104 - 0

*Cash received as collateral EUR 11,790 thousand. Overcollaterisation is disregarded in offsetting spec-

iﬁcation.

The table above presents items that, in certain circumstances, can be settled on a net basis, even though

they are presented on a gross basis in the balance sheet. The netting arrangement is based on a mutu-

ally enforceable general netting agreement (ISDA).

The total in the “Net” column of the table does not equal the sum of the preceding columns due to dif-

ferences between the valuation and collateral review dates. The collateral is determined such that, at the

time of the review, the collateral received fully neutralises the counterparty risk.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 78

DEBT SECURITIES ISSUED TO THE PUBLIC

(EUR 1,000)

Name Issue date Due date

Interest

Nominal Currency

BONUM 26102026 20 Oct 2021

20 Oct 2026 EB 3 months + 0.85%

20,000 EUR

BONUM 22042027 22 Apr 2022 22 Apr 2027

EB 12 months + 1.25%

50,000 EUR

BONUM 19072028 19 Jul 2023 19 Jul 2028 EB 6 months + 1.11% 50,000 EUR

Debt securities issued during the reporting period

BONUM 17042027 10 Apr 2024 17 Apr 2027 EB 3 kk + 1.95% 50,000 EUR

At the end of reporting period there are 3 pcs of Certiﬁcates of deposits, total nominal value EUR 15,000

(29,000) thousand, value EUR 5,000 thousand and average maturity 6,3 months.

(EUR 1,000)

31 Dec 2024 31 Dec 2023

Debt securities issued to the public 169,926 254,931

Certiﬁcates of deposits 14,780 28,965

Total debt securities issued to the public 184,706 283,896

NOTE 24 DEBT SECURITIES ISSUED TO THE PUBLIC

DEBT SECURITIES PRESENTED IN CASH FLOW RECONCILIATION TO BALANCE SHEET

(EUR 1,000)

31 Dec 2024 31 Dec 2023

Balance 1 Jan 283,896 322,214

Debt securities issued, increase 49,958 49,994

Certiﬁcates of deposits, increase 37,010 79,279

Total increase 86,968 129,273

Debt securities issued, decrease 135,000 -50,000

Certiﬁcates of deposits, decrease 50,526 -118,219

Total decrease -185,526 -168,219

Total changes of cash ﬂow -98,558 -38,946

Valuation -632 629

Balance at the end of period 184,706 283,896

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 79

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Provision for expected credit loss 414 402

Other liabilities

Payment transfer liabilities 349 1,461

Rental liabilities, right of use items 616 616

Accrued expenses

Interest payable 18,165 20,555

Advances received 569 438

Other accrued expenses 2,573 2,717

Other

Liabilities on card transactions 8,850 16,087

Other 664 694

Total provisions and other liabilities 31,938 42,970

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Share capital 10,000 10,000

Fair value reserve

From measurement of equity instruments 714 527

From measurement of liability instruments -57 -526

Non-restricted reserves

Reserve for invested non-restricted equity 30,000 30,000

Retained earnings

Proﬁt (loss) for previous ﬁnancial years 9,566 8,136

Proﬁt (loss) for the period 784 2,406

Total equity 51,007 50,543

NOTE 25 PROVISIONS AND OTHER LIABLITIES

NOTE 26 EQUITY CAPITAL

Lease liabilities are presented in Note 29.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 80

SHARE CAPITAL

Share capital includes the paid share capital. Bonum Bank has a total of 1,400,000 shares. There was no

change during the ﬁnancial year.

RESTRICTED RESERVES

Fair value reserve

The fair value reserve includes the cumulative net change in the fair value of equity securities measured at

FVOCI and the cumulative net change in the fair value of debt securities measured at FVOCI. The change

in the fair value can be positive or negative. Cumulative gains and losses recognised in OCI are transferred

to retained earnings on disposal of an investment. An expected credit loss on debt security is recognised

in the income statement and added to the fair value reserve. The fair value reserve also includes chang-

es in the fair value of equity securities recognised in the fair value of comprehensive income, which are not

transferred to retained earnings upon later disposal.

NON-RESTRICTED RESERVES

The reserve for invested non-restricted equity includes the portion of subscription price that is not

recognised in share capital, as well as other equity investments which are not recognised in other reserves.

RETAINED EARNINGS

Retained earnings are earnings accrued in previous ﬁnancial years that have not been transferred to

equity reserves or distributed to shareholders.

SPECIFICATION OF CHANGES IN FAIR VALUE RESERVE 1 JAN - 31 DEC 2024

(EUR 1,000)

Liability

instruments

Equity

instruments Total

Fair value reserve 1 Jan -526 527 1

Fair value change, increases 1,600 371 1,971

Fair value change, decreases -1,010 -137 -1,147

Transferred from fair value reserve to

the income statement

5 - 5

Expected credit loss -10 - -10

Deferred taxes -117 -47 -164

Fair value reserve 31 Dec -57 714 657

SPECIFICATION OF CHANGES IN FAIR VALUE RESERVE 1 JAN - 31 DEC 2023

(EUR 1,000)

Liability

instruments

Equity

instruments Total

Fair value reserve 1 Jan -1,894 414 -1,480

Fair value change, increases 3,030 358 3,388

Fair value change, decreases -1,315 -217 -1,531

Expected credit loss -6 - -6

Deferred taxes -342 -28 -370

Fair value reserve 31 Dec -526 527 1

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 81

NOTE 27 COLLATERALS GIVEN AND RECEIVED

NOTE 28 OFF-BALANCE-SHEET COMMITMENTS

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Given on behalf of own liabilities and commitments

Other collaterals to the Bank of Finland - 143,199

Total collateral given - 143,199

Collaterals received

Debt securities 377,628 245,751

Derivative contracts 24,740 11,790

Collaterals received from banks of POP Bank Group 67,958 68,208

Total collateral given 470,325 325,749

Collaterals received from banks of POP Bank Group are long-term money market deposits related to

the offering of central credit institution services and made by the banks in the POP Bank Group to the

Bonum Bank. The amount of deposit liabilities in relation to the balance sheet total is conﬁrmed annu-

ally.

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Loan commitments 185,172 171,533

Total off-balance sheet commitments 185,172 171,533

The expected credit losses of off-balance sheet commitments are presented in Note 14.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 82

NOTE 29 LEASING

RIGHT-OF-USE ASSETS 31 DEC 2024

(EUR 1,000) Office buildings Total

Acquisition cost 1 Jan 1,318 1,318

Decreases -40 -40

Acquisition cost 31 Dec 1,279 1,279

Accumulated depreciation and impairment 1 Jan -708 -708

Accumulated depreciation on decreases and transfers 8 8

Depreciation -234 -234

Accumulated depreciation and impairment 31 Dec -934 -934

Carrying amount 1 Jan 610

Carrying amount 31 Dec 345

RIGHT-OF-USE ASSETS 31 DEC 2023

(EUR 1,000) Office buildings Total

Acquisition cost 1 Jan 867 867

Increases 451 451

Acquisition cost 31 Dec 1,318 1,318

Accumulated depreciation and impairment 1 Jan -543 -543

Depreciation -165 -165

Accumulated depreciation and impairment 31 Dec -708 -708

Carrying amount 1 Jan 324

Carrying amount 31 Dec 610

BONUM BANK PLC AS LESSEE

Bonum Bank Plc has leased mainly business premises.

Presented in Property, Plant and Equipment.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 83

(EUR 1,000) 31 Dec 2024 31 Dec 2023

Lease liabilities 1 Jan 616 329

Increases - 451

Decreases -262 -164

Lease liabilities 31 Dec 355 616

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Depreciation

Ofﬁce Buildings -262 -165

Total -262 -165

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Total cash outﬂow for leases -281 -175

LIABILITIES / LEASE LIABILITIES

AMOUNTS RECOGNISED IN PROFIT OF LOSS

AMOUNTS RECOGNISED IN STATEMENT OF CASH FLOWS

Presented in other liabilities.

Presented in Depreciation, Amortisation and Impairment of Property, Plant and Equipment.

Presented in other operating expenses.

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Interest on lease liabilities -20 -11

Presented in net interest income.

(EUR 1,000) 1 Jan - 31 Dec 2024 1 Jan - 31 Dec 2023

Variable lease payments not included in the

measurement of lease liabilities

-47 -62

Expenses relating to short-term leases -9 -6

Expenses relating to leases of low-value assets -35 -35

Total -91 -102

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 84

NOTE 30 RELATED PARTY DISCLOSURES

The related parties of Bonum Bank comprise the members of the company’s Board of Directors and

Executive Group and members of their immediate families. In addition, related parties include Bonum

Bank’s parent entity POP Bank Centre coop, as well as its managing director and deputy managing di-

rector. Furthermore, related parties include those entities over which key persons included in the man-

agement and/or members of their immediate families have control or joint control. Key persons included

in the management comprise Bonum Bank’s Board of Directors, CEO and Executive Group. In addition,

key persons include POP Bank Centre coop managing director and deputy managing director. Also, enti-

ties in the same group with Bonum Bank belong to the related parties.

In the ﬁnancial period 2024, Bonum Bank granted housing and consumption loans to related parties at

employee terms. These loans are tied to generally applied reference rates.

Assets

Key persons in

management Other related parties

31 Dec 2024 31 Dec 2023 31 Dec 2024 31 Dec 2023

Loans

ECL 8,000 8,000

Liabilities 412 271 382 -

Deposits 0 0 0 1

Off-balance sheet commitments

Loan commitments 7 34 35,951 30,905

Taseen ulkopuoliset sitoumukset

Luottolupaukset - 8 - 250

BUSINESS TRANSACTIONS WITH RELATED PARTY KEY PERSONS

COMPENSATION TO KEY PERSONS IN MANAGEMENT

1 Jan - 31 Dec

2024

1 Jan - 31 Dec

2023

Short-term employee beneﬁts 1,142 1,036

Total 1,142 1,036

COMPENSATION TO CEO AND MEMBERS OF THE BOARD

(EUR 1,000) Salaries and

remuneration

Ali-Tolppa Pia, CEO 285

Pulli Jaakko, Chairman of the Board 36

Linna Hanna, Vice Chairman of the Board 27

Lähteenmäki Ilkka, member of the Board 24

Kirsi Salo, member of the Board 24

Total 397

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 85

NOTE 31 EVENTS AFTER THE CLOSING DATE

Bonum Bank’s Board of Directors is not aware of other events having taken place after the closing date

that would have a material impact on the information presented in the ﬁnancial statements.

Bonum Bank Plc’s Board of directors’ report and

ﬁnancial statements 1 January - 31 December 2024 FINANCIAL STATEMENT 86

SIGNATURES TO THE FINANCIAL STATEMENTS AND BOARD OF

DIRECTORS’ REPORT

The ﬁnancial statements, prepared in compliance with the applicable ﬁnancial statement framework

give a true and fair view of Bonum Bank’s assets, liabilities, ﬁnancial position, and proﬁt or loss.

The Board of Directors’ report contains an account giving a true view of the business development and

performance of the Bonum Bank, as well as a description of the most signiﬁcant risks, uncertainties, and

other relevant aspects of the company’s status.

Espoo 14 February, 2025

Board of Directors of Bonum Bank Plc

Jaakko Pulli

Chairman of the Board

Pia Ali-Tolppa

CEO

Ilkka Lähteenmäki Kirsi Salo

Hanna Linna

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 87

Auditor’s note

A report on the audit performed has been issued today.

Espoo 14 February 14, 2025

KPMG OY AB

Tiia Kataja

APA

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 88

To the Annual General Meeting of Bonum Bank Plc

REPORT ON THE AUDIT OF THE FINANCIAL

STATEMENTS

OPINION

We have audited the ﬁnancial statements of

Bonum Bank Plc (business identity code 2192977-

5) for the year ended 31 December 2024. The ﬁ-

nancial statements comprise the balance sheet,

income statement, statement of comprehensive

income, statement of changes in equity, state-

ment of cash ﬂows and notes, including material

accounting policy information.

In our opinion the ﬁnancial statements give a true

and fair view of the bank´s ﬁnancial performance,

ﬁnancial position and cash ﬂows in accordance

with IFRS Accounting Standards as adopted by

the EU and comply with statutory requirements.

Our opinion is consistent with the additional re-

port submitted to the Board of Directors.

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 company in accord-

ance with the ethical requirements that are appli-

cable in Finland and are relevant to our audit, and

we have fulﬁlled our other ethical responsibilities

in accordance with these requirements.

We have not provided any non-audit services to

the bank.

We believe that the audit evidence we have ob-

tained is sufﬁcient and appropriate to provide a

basis for our opinion.

AUDITOR’S REPORT

MATERIALITY

The scope of our audit was inﬂuenced by our ap-

plication of materiality. The materiality is deter-

mined 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 state-

ments 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 ﬁnan-

cial statements. We have also taken into account

misstatements and/or possible misstatements

that in our opinion are material for qualitative rea-

sons 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 cur-

rent 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 mat-

ters. The signiﬁcant risks of material misstatement

referred to in the EU Regulation No 537/2014 point

of key audit matters below.

We have also addressed the risk of management

override of internal controls. This includes consid-

eration of whether there was evidence of man-

agement 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 re-

port is legally binding.

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 89

THE KEY AUDIT MATTER

HOW THE MATTER WAS ADDRESSED IN THE

AUDIT

Loans and receivables from customers (notes 2, 12, 13, 14 and 16 to ﬁnancial statements)

● Loans and receivables from customers

amounted to EUR 198 million. Interest and

fee and commission income on receivables

from customers represent a signiﬁcant

part of Bonum Bank’s revenue.

● The calculation of expected credit loss-

es in accordance with IFRS 9 Financial In-

struments is based on the valuation mod-

els used by the POP Bank Group and on

expert estimates. The calculation involves

assumptions, estimates and manage-

ment judgement, in particular regarding the

probability of expected credit losses and

the determination of signiﬁcant increases

in credit risk.

● The components of the expected loss cal-

culation are updated and reﬁned based on

actual credit risk developments, the de-

velopment of the calculation process, and

regulatory changes and requirements.

● Due to the signiﬁcance of the carrying

amount of receivables involved, the com-

plexity of the calculation methods used

and management judgement, the valuation

of receivables is addressed as a key audit

matter.

● We evaluated compliance with lending

guidelines, credit risk management, and

policies and controls for recording and

monitoring receivables.

● We gained understanding of the control

environment for outsourced process ele-

ments based on ISAE 3402 reports.

● We assessed the models and underlying

key assumptions for calculating expected

credit losses, as well as tested the controls

over the calculation process and credit risk

models for expected credit losses.

● We involved our own IFRS and ﬁnancial in-

struments specialists.

● Furthermore, we considered the appropri-

ateness of the notes in respect of receiva-

bles and expected credit losses.

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 90

THE KEY AUDIT MATTER

HOW THE MATTER WAS ADDRESSED IN THE

AUDIT

Investments assets and derivative instruments (Accounting policies and notes 4, 3, 5, 13, 14, 17 and 23

to ﬁnancial statements)

● The carrying amount of investments as-

sets totals EUR 219 million mainly consist-

ing of investments measured at fair value.

The derivative assets amounted to EUR 22

million and derivative liabilities EUR 7 mil-

lion comprising contracts held hedging

purposes. Derivatives are measured at fair

value in ﬁnancial statements.

● The fair value of ﬁnancial instruments is

determined using either prices quoted in

an active market or POP Bank Group’s own

valuation techniques where no active mar-

ket exists. Determining fair values involves

management judgements, especially in re-

spect of those instruments for which mar-

ket-based data is not available.

● As the valuation of investments assets and

derivative positions involves management

judgement and the hedge accounting pro-

cess includes many calculations steps, the

measurement and accounting treatment

of these items is addressed as a key audit

matter.

● We evaluated the appropriateness of the

accounting principles applied and the valu-

ation techniques used by POP Bank Group.

● Our audit procedures included, among oth-

ers, testing controls over the measurement

process for ﬁnancial assets carried at fair

value, among others.

● As part of our year-end audit procedures,

we compared the fair values used in meas-

urement of investments assets with exter-

nal price references.

● KPMG IFRS and ﬁnancial instruments spe-

cialists were involved in the audit.

● Finally, we considered the appropriateness

of the notes on investments assets and

derivatives.

RESPONSIBILITIES OF THE BOARD OF

DIRECTORS AND THE MANAGING DIRECTOR

FOR THE FINANCIAL STATEMENTS

The Board of Directors and the Managing Direc-

tor are responsible for the preparation of ﬁnan-

cial statements that give a true and fair view in

accordance with IFRS Accounting Standards as

adopted by the EU, and that ﬁnancial statements

comply with statutory requirements. The Board of

Directors and the Managing Director are also re-

sponsible for such internal control as they deter-

mine is necessary to enable the preparation of ﬁ-

nancial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the ﬁnancial statements, the Board of

Directors and the Managing Director are responsi-

ble for assessing the company’s ability to continue

as a going concern, disclosing, as applicable, mat-

ters relating to going concern and using the going

concern basis of accounting. The ﬁnancial state-

ments are prepared using the going concern basis

of accounting unless there is an intention to liqui-

date the company 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

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 91

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 ma-

terial if, individually or in the aggregate, they could

reasonably be expected to inﬂuence the economic

decisions of users taken on the basis of the ﬁnan-

cial statements.

As part of an audit in accordance with good au-

diting practice, we exercise professional judgment

and maintain professional skepticism throughout

the audit. We also:

● Identify and assess the risks of materi-

al misstatement of the ﬁnancial statements,

whether due to fraud or error, design and per-

form audit procedures responsive to those

risks, and obtain audit evidence that is suf-

ﬁcient and appropriate to provide a basis for

our opinion. The risk of not detecting a mate-

rial misstatement resulting from fraud is high-

er 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 cir-

cumstances, but not for the purpose of ex-

pressing an opinion on the effectiveness of

the company’s internal control.

● Evaluate the appropriateness of accounting

policies used and the reasonableness of ac-

counting estimates and related disclosures

made by management.

● Conclude on the appropriateness of the

Board of Directors’ and the Managing Direc-

tor’s use of the going concern basis of ac-

counting and based on the audit evidence

obtained, whether a material uncertainty ex-

ists related to events or conditions that may

cast signiﬁcant doubt on the company’s abil-

ity to continue as a going concern. If we con-

clude that a material uncertainty exists, we

are required to draw attention in our auditor’s

report to the related disclosures in the ﬁnan

cial statements or, if such disclosures are in-

adequate, to modify our opinion. Our conclu-

sions are based on the audit evidence ob-

tained up to the date of our auditor’s report.

However, future events or conditions may

cause the company to cease to continue as a

going concern.

● Evaluate the overall presentation, structure

and content of the ﬁnancial statements, in-

cluding the disclosures, and whether the ﬁ-

nancial statements represent the underlying

transactions and events so that the ﬁnancial

statements give a true and fair view.

We communicate with those charged with gov-

ernance regarding, among other matters, the

planned scope and timing of the audit and signif-

icant audit ﬁndings, including any signiﬁcant de-

ﬁciencies in internal control that we identify dur-

ing our audit.

We also provide those charged with governance

with a statement that we have complied with rel-

evant ethical requirements regarding independ-

ence, and communicate with them all relation-

ships 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 au-

dit of the ﬁnancial statements of the current pe-

riod and are therefore the key audit matters. We

describe these matters in our auditor’s report un-

less law or regulation precludes public disclosure

about the matter or when, in extremely rare cir-

cumstances, we determine that a matter should

not be communicated in our report because the

adverse consequences of doing so would reason-

ably be expected to outweigh the public interest

beneﬁts of such communication.

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 92

OTHER REPORTING REQUIREMENTS

INFORMATION ON OUR AUDIT ENGAGEMENT

We were ﬁrst appointed as auditors by the share-

holders’ meeting on 27 June 2013, and our ap-

pointment represents a total period of uninter-

rupted engagement of 12 years.

OTHER INFORMATION

The Board of Directors and the Managing Direc-

tor are responsible for the other information. The

other information comprises the report of the

Board of Directors.

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 oth-

er 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. Our responsibility also

includes considering whether the report of the

Board of Directors has been prepared in compli-

ance with the applicable provisions.

In our opinion, the information in the report of the

Board of Directors is consistent with the infor-

mation in the ﬁnancial statements and the report

of the Board of Directors has been prepared in

compliance with the applicable provisions.

If, based on the work we have performed, we

conclude that there is a material misstatement

of the report of the Board of Directors, we are

required to report that fact. We have nothing to

report in this regard.

Helsinki 14 February 2025

KPMG OY AB

Tiia Kataja

Authorised Public Accountant, APA

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 93

To the Board of Directors of Bonum Bank Plc

We have performed a reasonable assur-

ance engagement on the ﬁnancial statements

743700RFAN8QA5JFA150-2024-12-31-0-eng.html

of Bonum Bank Plc (Business ID 2192977-5) that

have been prepared in accordance with the Com-

mission’s regulatory technical standard for the ﬁ-

nancial year ended 31.12.2024.

RESPONSIBILITIES OF THE BOARD OF

DIRECTORS AND THE MANAGING DIRECTOR

The Board of Directors and the Managing Director

are responsible for the preparation of the compa-

ny’s report of the Board of Directors and ﬁnan-

cial statements (the ESEF ﬁnancial statements)

in such a way that they comply with the require-

ments of the Commission’s regulatory technical

standard. This responsibility includes:

● preparing the ESEF ﬁnancial statements in

XHTML format in accordance with Article 3 of

the Commission’s regulatory technical stand-

ard and

● ensuring the consistency between the ESEF

ﬁnancial statements and the audited ﬁnan-

cial statements.

The Board of Directors and the Managing Director

are also responsible for such internal control as

they determine is necessary to enable the prepa-

ration of ESEF ﬁnancial statements in accord-

ance with the requirements of the Commission’s

regulatory technical standard.

AUDITOR’S INDEPENDENCE AND QUALITY

MANAGEMENT

We are independent of the company in accord-

ance with the ethical requirements that are appli-

cable in Finland and are relevant to the engage-

ment we have performed, and we have fulﬁlled our

other ethical responsibilities in accordance with

these requirements.

INDEPENDENT AUDITOR’S REPORT ON THE ESEF FINANCIAL

STATEMENTS OF BONUM BANK PLC

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 pro-

cedures regarding compliance with ethical re-

quirements, professional standards and applica-

ble legal and regulatory requirements.

AUDITOR’S RESPONSIBILITIES

Our responsibility is to, in accordance with Chap-

ter 7, Section 8 of the Securities Markets Act, pro-

vide assurance on the ﬁnancial statements that

have been prepared in accordance with the Com-

mission’s regulatory technical standard.

Our responsibility is to indicate in our opinion to

what extent the assurance has been provided. We

conducted a reasonable assurance engagement

in accordance with International Standard on As-

surance Engagements (ISAE) 3000.

The engagement includes procedures to obtain

evidence on:

● whether the ﬁnancial statements that are in-

cluded in the ESEF ﬁnancial statements are,

in all material respects, in accordance with

the requirements of Article 4 of the Commis-

sion’s regulatory technical standard and

● whether there is consistency between the ES-

EF ﬁnancial statements and the audited ﬁ-

nancial statements.

The nature, timing and extent of the selected pro-

cedures depend on the auditor’s judgment. This

includes an assessment of the risk of a material

deviation due to fraud or error from the require-

ments of the Commission’s regulatory technical

standard.

We believe that the evidence we have obtained is

sufﬁcient and appropriate to provide a basis for

our opinion.

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 94

OPINION

Our opinion pursuant to Chapter 7, Section 8 of

the Securities Markets Act is that the compa-

ny’s ﬁnancial statements that are included in the

ESEF ﬁnancial statements of Bonum Bank Plc

743700RFAN8QA5JFA150-2024-12-31-0-eng.html

for the ﬁnancial year ended 31.12.2024 have been

prepared, in all material respects, in accordance

with the requirements of the Commission’s regu-

latory technical standard.

Our opinion on the audit of the ﬁnancial state-

ments of Bonum Bank Plc for the ﬁnancial year

ended 31.12.2024 has been expressed in our audi-

tor’s report dated 14.2.2025. With this report we do

not express an opinion on the audit of the ﬁnan-

cial statements nor express another assurance

conclusion.

Helsinki 13 March 2025

KPMG OY AB

Tiia Kataja

Authorised Public Accountant, APA

Bonum Bank Plc’s Board of directors’ report and ﬁnancial statements 1 January - 31 December 2024 95