Finland is a prosperous, democratic country in Northern Europe with a high standard of living, a low level of corruption, and a high level of education and health care.
Finland has a modern highly industrialized market economy with competitive manufacturing, engineering, telecommunications, and electronics industries.
Finnish banks and financial markets avoided severe consequences of global financial crisis 2008-2009. Finnish banking landscape is rather diversified and consists of both systemic universal banks operating throughout the country and internationally, and specialized regional savings and cooperative banks. The majority of foreign-controlled banks operating in Finland are originated from Sweden.
Finland joined the Euro Area on 1 January 1999.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|214.1 bln EUR (+0.03%)||39 000 EUR (+0.03%)||1.4 % (2015: 0.5 %)|
According to Eurostat, nominal GDP of Finland in 2016 was 214.1 bln EUR.
Finland underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.4% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 1.4% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 1. Real GDP Growth in Finland. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Finland was 39 000 EUR.
Finland has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 7.6% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 2. GDP Per Capita at Purchasing Power Parity in Finland; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|0.2 % (unchanged)||0.8 % (unchanged)||0.4 % (2015: -0.2 %)|
According to Eurostat, inflation rate in Finland in 2016 expressed as annual percentages of average consumer prices was 0.4% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 3. Inflation Rate in Finland. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|8.8 % (2015: 9.4 %)|
|Government Bond Yield (Sep 2017)|
|0.58 % (Aug 2017: 0.65 %)|
Chart 4. Government bond yield of Finland. Source: Eurostat.
|AA+ (very high credit quality), outlook stable||Aa1 (high grade), outlook stable|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Finland signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Finland signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Finland and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Finland signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Finland has signed bilateral agreements with 57 jurisdictions to automatically receive information:
Finland has signed bilateral agreements with 69 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in Finland|
|IGA in effect since 05 March 2014, Model 1|
Finland has FATCA agreement with the U.S. in effect since 05 March 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Finland are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Finnish financial accounts hold in U.S. financial institutions will be reported to Finnish authorities.
|Financial Market Development|
|5.5 (max 7.0), 4th out of 138 countries|
|6.6 (max 7.0), 1st out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Finland is scored 5.5 out of maximum 7.0 and ranked 4th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 5.8 (7th place).
Chart 5. Financial Market Development in Finland. Source: WEF.
Soundness of banks is scored 6.6 bringing Finland into the 1st place.
Chart 6. Soundness of Banks in Finland. Source: WEF.
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Finland are summarised in Table 1.
|Scheme Participants||all credit institutions operating in Finland, branches of Finnish banks abroad|
|Scheme Exemptions||branches of foreign banks (covered by their home countries)|
|Eligible Depositors||natural persons, legal entities|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 1. Deposit guarantee scheme in Finland.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Euro)||Foreign Currency|
|Aaa (prime)||Aaa (prime)|
Local currency (Euro) deposit ceiling for Finland is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
|Average Deposit Rate (Aug 2017, EUR)|
|0.34 % (Jul 2017: 0.39 %)|
Chart 7. Deposit Rates in Finland. Source: ECB.
|Number of Banks|
|Consolidated Assets (2016)|
|537.38 bln EUR (-1.81%)|
|Recent Changes (2016)|
|new banks: 3, closed banks: 5|
Currently there are 273 credit institutions operating in Finland.
In 2016 consolidated banking assets in Finland were 537.38 bln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.
Chart 8. Consolidated banking assets in Finland.
Recent structural changes (2013 - 2016) of the banking sector of Finland are summarised in Table 2.
|Number of Opened Banks||1||3||3||3|
|Number of Closed Banks||6||15||14||5|
Table 2. Recent structural changes in the banking sector of Finland.
The list of the most recently opened banks in Finland is provided in Table 3.
|GCC Capital AB , filial i Finland (new)||November 2016|
|Nordea Hypoteksbank Abp (new)||October 2016|
|Eurocard AB, filial i Finland (new)||September 2016|
|Citibank Europe plc, sivuliike Suomessa (new)||November 2015|
|Collector Bank AB, filial i Finland (new)||July 2015|
|Nordea Bank AB (publ), Suomen sivuliike (new)||June 2015|
|BNP Paribas Fortis SA/NV, sivuliike Suomessa (closed)||August 2014|
|Svea Ekonomi AB, Filial i Finland (new)||July 2014|
|TF Bank AB, filial Finland (new)||March 2014|
|Avida Finans AB, sivuliike Suomessa (new)||October 2013|
Table 3. The most recently opened banks in Finland.
All the credit institutions operating in Finland can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||34|
There are 34 branches of foreign banks from 7 different countries in Finland. Table 5 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|
|1||OP Yrityspankki Oyj|
|2||Aktia Bank Plc|
|3||Nordea Bank Finland Plc (closed)|
|4||Danske Bank Oyj|
Established in 1902, OP Yrityspankki Oyj (formerly OP Corporate Bank) is a Finnish financial services company, providing banking, non-life insurance, and asset management services to private, corporate, and institutional customers in Finland and internationally. OP Yrityspankki Oyj also acts as a central bank of OP Cooperative being responsible for the OP Group liquidity management and international operations.OP Yrityspankki is a wholly owned subsidiary of OP Cooperative.
In 2016 total assets of Pohjola Bank Plc were 58 869,83 mln EUR. In 2016 the bank's operating income was 592,08 mln EUR.
Pohjola Bank Plc is rated by Fitch, Moody's. Long-term credit rating assigned to the bank by Fitch is WD (withdrawn). Long-term credit rating assigned to the bank by Moody's is Aa3 (high grade). Pohjola Bank Plc participates in deposit guarantee scheme of Finland. This scheme covers accounts up to 100 000 EUR per bank per depositor.
Established in 1825 as a savings bank, Aktia Bank Plc is a Finnish commercial bank. Aktia Bank provides a broad range of banking products and services as well as asset management, insurance and real estate services.
In 2016 total assets of Aktia Bank Plc were 8 125,15 mln EUR. In 2016 the bank's operating income was 47,82 mln EUR.
Aktia Bank Plc is rated by Fitch, Moody's. Long-term credit rating assigned to the bank by Fitch is BBB+ (good credit quality). Long-term credit rating assigned to the bank by Moody's is A3 (upper medium grade). Aktia Bank Plc participates in deposit guarantee scheme of Finland. This scheme covers accounts up to 100 000 EUR per bank per depositor.
Since 2 January 2017 Nordea banking group operates in Finland via its branch Nordea Bank AB (publ), Suomen sivuliike, the subsidiary Nordea Bank Finland Abp was merged into its parent company.
In 2016 total assets of Nordea Bank Finland Plc were 236,26 bln EUR. In 2016 the bank's operating income was 1 037,56 mln EUR.
Nordea Bank Finland Plc is rated by Fitch, Moody's. Long-term credit rating assigned to the bank by Fitch is AA- (very high credit quality). Long-term credit rating assigned to the bank by Moody's is Aa3 (high grade). Nordea Bank Finland Plc participates in deposit guarantee scheme of Finland. This scheme covers accounts up to 100 000 EUR per bank per depositor.
Danske Bank Oyj operates as a universal bank, focused on providing corporate banking products and services to Finnish and international corporate and institutional customers.
In 2016 total assets of Danske Bank Plc were 28 889,16 mln EUR. In 2016 the bank's operating income was 196,85 mln EUR.
Danske Bank Plc is rated by Moody's. Long-term credit rating assigned to the bank by Moody's is A2 (upper medium grade). Danske Bank Plc participates in deposit guarantee scheme of Denmark. This scheme covers accounts up to 100 000 EUR per bank per depositor.