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Capital Markets

Finland: OKO expands

Fortified by the strength of its retail operations, OKO has forged lucrative partnerships in eastern Europe and leveraged its strength in local bond markets.

The financial cornershop

OKO expands from its local base

In recent years Finland's OKO Bank has enjoyed a similarly buoyant period of expansion to Erste Bank's. Originally set up in 1902 as the central bank for the country's local cooperative banks, OKO is a member of the OP Bank Group. OP's Central Cooperative owns 39.4% of OKO Bank and 56.3% of the bank's votes, and is, in turn, controlled by Finland's cooperative banks, which are mutual organizations owned by just over 1 million members.

According to Timo Ritakallio, first executive vice-president and member of the executive board at OKO's Helsinki headquarters, the past five years have been a period of explosive growth for the bank. "It is true to say that over the last 10 years or so the focus of the whole OP Group has been on increasing profitability," he says. For OKO, there have been two principal reasons explaining the development of its business model in recent years with its more aggressive focus on growth, both of which are similar to those underpinning Caja Madrid's expansion in Spain.

"When we evaluated our strategy five or six years ago we noted that we already had a very high share of about 35% of the housing market," says Ritakallio.

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