The Finnish Financial Supervisory Authority (FIN-FSA) published its review of the financial position and key risks of supervised entities, concluding that solvency remained strong across banking, employee pensions, and life and non-life insurance in 2024, while uncertainty in the economy and financial markets increased. It points to geopolitical and trade policy tensions, a still-weak Finnish economy, and stress in real estate related markets as key sources of downside risk, alongside persistent cyber and hybrid threats. Banks’ Common Equity Tier 1 ratio was 18.2% at end-2024 (18.3% at end-2023) and the total capital ratio was 22.2% (22.1%), with profits supported by net interest income even as falling rates slowed growth towards year-end. Non-performing loans remained low by European comparison but continued to rise slightly in corporate and household portfolios, with weakening credit quality highlighted in consumer credit and in corporate sectors affected by higher debt servicing costs and a weak cycle. Employee pension institutions’ solvency ratio was 129.3% at end-2024 (126.7% at end-2023) with EUR 5.4 billion higher solvency capital and a 9.1% investment return, while equities reached a record allocation of nearly 53%. Life insurers’ solvency ratio fell to 222.2% (from 234.6%) and non-life insurers’ to 254.6% (from 265.5%), and the fund sector’s capital reached a record EUR 205 billion, with about a quarter of UCITS assets invested in US instruments and 10 open-end real estate funds having activated liquidity management tools. FIN-FSA flagged responding to operating environment uncertainty as a supervisory priority for 2025, emphasising the importance of capital and liquidity buffers, risk management and preparedness.

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