The sphere of economic interests of many Russian businessmen has long spread to the Finnish market, while banks in Finland play the most important role in servicing monetary settlements between counterparties. Some Russian companies use the services of the Finnish banking system to conduct offshore business. In addition, financial institutions in the Republic of Finland provide loans not only to citizens of the country, but also to non-residents.
What is the Finnish banking system
Finland, like many other states, has a two-tier banking system, which includes the Central Bank and a number of commercial banks subordinate to it. This structure of the organization of the banking system ensures well-coordinated work to perform the functions assigned to financial institutions.
The monetary policy of the country of Suomi is fully consistent with the basic principles of the functioning of the European financial system, since the Republic of Finland is a member of the European Union and is part of the Eurozone.
Since 1999, the national currency (the Finnish mark) has been replaced by the euro, which has taken over the functions of the main means of making payments.
The banking sector in Finland is characterized by a high concentration of not only national but also foreign banking capital. During periods of global financial crises or regional instability, the Suomi banking system takes on the role of one of the main regulators of the economy, influencing inflation processes through money emission, as well as operations with securities and currency.
It should be noted that the Finnish banking system is stable and demonstrates stable growth trends. The constantly developing banking sector ensures the efficiency of the functioning of the national economy and helps to attract foreign investment.
What is typical for banks in Finland
Finnish banks are reliable and stable. These financial institutions play a critical role in the economy of the country, as well as the entire eurozone as a whole, because they:
- provide a profitable investment of citizens' funds in commercial activities;
- lend to commercial organizations and the population;
- facilitate the organization of payments for goods and services;
- ensure the circulation of securities in the state and operations with them;
- create new forms of money, which significantly speeds up and facilitates settlements between counterparties.
The commercial banks of the Republic of Finland are engaged in the creation of partial reserves of deposit funds. The availability of reserve financial resources at a constant disposal allows the banks of Suomi to fulfill their obligations to depositors in a timely manner, avoiding conflicts.
The banking sector in the state is regulated by the Finnish Financial Supervision Authority, which monitors the legality of banking operations and compliance with all established rules and regulations.
Banking services in Suomi are simple and efficient due to the predominant use of non-cash payments.
Role of the Central Bank
The Central Bank of the Republic of Finland stands at the head of the country's banking hierarchy and reports directly to the state parliament. The management of the bank and control over the activities of its administration is carried out through the Parliamentary Supervisory Council, as well as through the Bank's Council.
The Central Bank of Suomi has the following functions:
- implementation of monetary policy, as well as the study of the financial sector of the economy and forecasting its development;
- banking operations;
- control of indicators of stability of the financial system;
- implementation of interbank settlements;
- management of credit and operational risks, as well as risks associated with fluctuations in the exchange rate and interest rate;
- support of monetary circulation in the state, emission of money, etc.
The official website of the Central Bank of Finland is available in Finnish, Swedish and English at www.suomenpankki.fi. On the website of the Central Bank of Suomi, you can find information about the main directions of the state's monetary policy, get acquainted with indicators of financial stability and other important statistical data.
Which international banks are represented in Finland
The banking sector in Finland is represented by many financial and credit institutions, including those with foreign capital. According to the legislation of Suomi and the EU, not only national financial organizations, but also structural divisions of banks of other countries can accept depositors' money, as well as issue loans and carry out other banking operations.
The presence of international banks in the Finnish financial market makes it possible to significantly expand the existing infrastructure, accelerate money circulation and create new jobs.
At the same time, the repatriation of capital from direct investors has a negative impact on the Finnish economy and the system of national accounts, since the net profit that is reinvested in donor countries could serve for expanded reproduction in Finland.
The table shows the most famous foreign banks currently operating in the Finnish financial market:
| Bank | Headquarters | Year of foundation | Web site |
|---|---|---|---|
| Citibank | New York, USA | 1812 | www.citi.com |
| Credit Agricole Corporate and Investment Bank | Paris, France | 2004 | www.ca-cib.com |
| Danske bank | Copenhagen, Denmark | 1871 | danskebank.com |
| Deutsche Bank | Frankfurt, Germany | 1870 | db.com |
| DnB NOR | Oslo, Norway | 1822 | www.dnb.no |
| Nordea | Stockholm, Sweden | 2000 | Nordea.com |
| Skandinaviska Enskilda Banken | Stockholm, Sweden | 1972 | www.sebgroup.com |
| Swedbank | Stockholm, Sweden | 1920 | www.swedbank.com |
| Carnegie Investment Bank | Stockholm, Sweden | 1803 | www.carnegie.se |
It follows from the table that the largest number of direct investments in the Finnish banking sector comes from the Scandinavian countries (Sweden, Norway), which contributes to the opening of representative offices in Suomi of such large financial institutions as Nordea Bank, Swedbank, Carnegie Bank, etc. .d. At the same time, banking groups from Germany, Denmark, France, the USA and other countries are pursuing their business interests in Finland.
What is known about the banks of the CIS countries in Finland
The banking sector of Suomi is represented by large national and international financial institutions. Thus, the Finnish banking market is dominated by four financial groups, which hold about 81% of the market.
The largest group with a market share of 35.5% is OP Financial Group, which consists of 160 cooperative banks. The second largest is the Nordea group with a market share of 26.4%. All of these groups are of strategic importance to the national economy.
The high capitalization and reporting requirements of banking institutions make the Finnish financial market difficult for many applicants.
In addition, the European Union has a directive on the prevention of money laundering, which imposes obligations on banks to verify customers and the sources of origin of their financial resources.
Perhaps that is why today there are no banks in Finland with a majority stake in the founding capital owned by financial groups from the CIS countries.
One of the largest domestic banks, Sberbank, which has a network of its branches not only in Ukraine, Belarus, Kazakhstan, India, China, Turkey, but also in a number of countries of Central and Western Europe (Switzerland, Germany, Austria, Serbia, Bosnia and Herzegovina, Czech Republic, Hungary, Croatia, Slovenia), as well as other Russian banks.
At the same time, such banks as Credit Agricole Corporate and Investment Bank, BNP Paribas Fortis, Citibank and others, which belong to the category of international and have their branches in different countries of the world, operate both in the territory of the Republic of Finland and in the territory of the Russian Federation.
List of leading Finnish banks
When choosing a financial institution for opening an account, making a deposit, transferring funds or obtaining a loan, customers pay attention to the main indicators of banks' activities. These include the size of the bank's assets, its financial results, profitability, etc.
The list of Finnish banks that demonstrate high performance (as of 2021) is presented in the form of a table:
| Bank | Total assets, USD billion | Net profit, USD million | Return on assets,% |
|---|---|---|---|
| OP Corporate Bank PLC | 160 | 1.37 | 0.0009 |
| Nordea Bank | 287 | 1.158 | 0.0004 |
| Danske bank | 39 | 236 | 0.605 |
| Evli Bank PLC | 0.909 | 11.7 | 1.287 |
| Aktia Savings Bank | 11.786 | 63 | 0.535 |
| Bank of aland | 6, 180 | 24 | 0.388 |
| BNP Paribas Fortis | 357 | 2000 | 0.56 |
| POP Bank Group | 5.09 | 10 | 0.196 |
Based on the bank's rating, clients can get an idea of its reliability. Nevertheless, when choosing a bank for servicing, it is recommended to focus not only on the rating of a financial institution (which reflects only the current state of affairs), but also on the history of its formation in the financial market.
How to open a bank account in Finland
Banking activities in Finland are largely regulated by European-wide directives, including anti-corruption and anti-money laundering regulations. Therefore, before opening an account for a client, banking institutions carefully verify his identity, as well as the sources of origin of funds received on the account.
In addition, there must be a valid reason (documented) to open an account, for example:
- studying at a Finnish university;
- work in a company in Finland;
- opening your own company;
- purchase of real estate.
When opening an account, individuals are usually required to:
- passport;
- information about the purpose of staying in the country and opening a deposit;
- a certificate from a university or from an employer in Finland (if any);
- information about the presence or absence of similar accounts with the client in other banks;
- a certificate of the legality of the origin of funds from the country in which the client is a taxpayer;
- information on how you plan to use the money from the account, etc.
When opening an account, legal entities provide the bank with the following documents:
- certificate confirming the registration of the company;
- copies of the memorandum of association certified by a notary;
- an extract from the minutes of the meeting of the founders of the company with the decision to open an account abroad, etc.
All necessary documents can be prepared in one of the following languages:
- Finnish;
- Swedish;
- English.
The decision to open an account for a client in a Finnish bank is usually made within 1-2 weeks. At the same time, the complexity of the opening procedure is compensated by high-quality service and additional bonuses.
Features of lending in banks in Finland
One of the main services of banking organizations in Finland is lending. Moreover, in terms of the availability of credit resources, the Republic of Finland is often the leader among the EU countries. Low interest rates ensure a moderate overpayment for borrowers' use of loan funds.
Many banks in Suomi finance the acquisition by citizens of commercial and residential real estate, vehicles, and also issue loans for the purchase of consumer goods or payment for services (including educational).
The procedure for applying for a loan in Suomi is greatly simplified due to the ability to apply for financing via the Internet.
The main loan products of the most famous Finnish banks are presented in the table:
| Bank | Lending types |
|---|---|
| Aktia Savings Bank | Mortgages, car loans, educational loans, financing of repair and reconstruction |
| Helsinki OP Bank | Mortgages, car loans, consumer loans, student loans |
| S-Bank | Unsecured loans, lines of credit, mortgages, student loans |
| Suomen AsuntoHypoPankki | Mortgages, ASP Loans, Consumer Loans, Reverse Mortgages, Credit Cards |
When considering client applications for the issuance of various loans, the requirements of financial institutions to clients are usually not limited to setting the age limit, but also relate to other criteria that characterize the good faith and solvency of the borrower.
What is required to obtain a mortgage in Finland
Real estate in the country of Suomi is an attractive investment object, and also entitles its owners to receive benefits for living in Finland in the form of free medical care, education, etc. Finnish housing, as a rule, is quite expensive, and for its acquisition, Finnish banks are ready to provide mortgage loans to both residents and non-residents.
To obtain financing, the borrower must comply with the requirements set by banks in order to minimize the risks associated with insolvency of clients.
The main criteria for assessing debtors by lending banks in Suomi are presented in the table:
| Criterion | Required value |
|---|---|
| Borrower's age, years | 21-65 |
| Own real estate | + |
| Source of permanent income | + |
| Positive credit history | + |
In 2021, Finnish banks provide mortgage loans to non-citizens, but on less favorable terms than for citizens of Suomi. Before making a decision, you should compare the terms of lending in Finnish and domestic banks, presented in the table. It should be borne in mind that domestic banks do not issue a mortgage for the purchase of real estate abroad, but issue housing loans only within the country.
| Conditions | Finnish banks | Domestic banks |
|---|---|---|
| The maximum amount of financing,% of the value of the property | Up to 50 | Up to 100 |
| Interest rate, % | 5-8 | 8-18 |
| Loan term, years | 5-15 | Up to 30 |
| Loan currency | Euro | Ruble (sometimes dollar, euro) |
Borrowers applying for a mortgage loan in Finland must provide the following documents:
- international passport;
- income statement (usually for the last two years);
- title documents for real estate;
- documents confirming the presence of real estate in the ownership of the borrower on the territory of the Russian Federation or in another country;
- statements confirming a good credit history of the client;
- real estate appraisal report serving as collateral.
The listed documents are submitted for consideration to the bank in two copies: in Russian and with a notarized translation into Finnish.
It should be noted that Russians who have acquired Finnish real estate can apply for a residence permit or other benefits.
Features of the transfer of funds
The need for remittances from one country to another may be due to various reasons. It should be noted, however, that money transfer agencies tend to charge fees for such transactions. Thus, it is quite profitable to use the option of transferring funds between bank accounts of financial institutions located in different countries, although a fee will also need to be paid for withdrawing the transferred funds from the account.
For large money transfers, there are international agencies such as Western Union or MoneyGram.
To receive money in Finland or send funds from Finland to another country, it is enough to deposit the required amount in the agency of one country and receive them at the office of the same agency using the identification number of the operation in another country. In addition, you can transfer money using online services such as PayPal, Moneybookers, etc.
For bank transfers within the European Union, you can use the EU Standard Transfer system, which has relatively low transaction fees. However, the transfer amount using this system cannot exceed 12.5 thousand euros.
How offshore accounts in Finnish banks are served
The Republic of Finland is not considered an offshore jurisdiction in the full sense of the word, since in all cities of this state from Imatra to Kemijärvi, business is taxed (albeit small), it is audited and financial statements are kept. In addition, the information about the owners of the companies is not confidential information.
Nevertheless, many business representatives seek to open accounts in Finnish banks, which, unlike similar institutions in Cyprus or other offshore zones, ensure the safety of savings and stability of service even during global crises.
For example, the Finnish bank Evli Bank Plc allows you not only to save money received in the form of profit, but also to manage assets to increase them.
To open such an account in Suomi, it is necessary to confirm the legality of the origin of the funds. It should be borne in mind that investment accounts are usually opened for an amount of at least $ 300,000.
In addition, opening an account presupposes the personal presence of the client at the bank branch during registration.
The ability to use external asset management in Finnish banks gives account holders certain privileges, including:
- reduction in operating costs;
- provision of additional services and bonuses;
- legal protection and advice;
- the possibility of remote opening of accounts without the need to stay in Suomi.
Let's summarize
Close cultural and economic ties between the Russian Federation and Finland contribute to the development of trade and business between states. The stability of the banking system of the country of Suomi makes it attractive for opening accounts in Finnish banks. The Finnish banking sector not only provides quality customer service, but also provides a variety of loans, including mortgages.
Buying commercial and residential real estate in Lappeenranta, Raahe, Orivesi and other cities in Finland gives its owners the opportunity to obtain a residence permit in the country, as well as other benefits.
