Finnish Financial Supervisory Authority reports Finnish banks’ CET1 ratio at 18.2% and continued strong solvency in pension and insurance sectors

The Finnish Financial Supervisory Authority (FIN-FSA) published its assessment of the Finnish financial sector’s capital and solvency position, concluding that banks, employee pension institutions and insurers remained well-capitalised through the third quarter of 2025 even as the operating environment stayed uncertain. The review highlights a weaker Finnish macroeconomic backdrop and market risks, while noting that falling interest rates are pressuring banks’ net interest income. In banking, capital ratios remained strong and above the European average, with the Common Equity Tier 1 ratio at 18.2% at end-September 2025 and the total capital ratio at 21.9%. Profitability stayed at a good level, but operating profit fell year-on-year as lower net interest income offset improvements in impairments; non-performing loans remained among the lowest in Europe, and liquidity and funding conditions were described as stable with declining deposit and market funding costs. The employee pension sector’s solvency ratio strengthened to 129.9%, with solvency capital increasing by EUR 2.1 billion and a 4.7% investment return for January–September. Life insurers’ solvency stayed at 222%, with premiums written up by an average 17% and investment returns of 2.3% (excluding unit-linked backing assets), while non-life insurers’ solvency was 251%, own funds were just over EUR 9 billion, premiums written rose 4.6%, and the combined ratio improved to 97.8% alongside a third-quarter investment return of 3.2%.