This is an interesting connection. In my opinion, Tradeka’s board should do its homework and stop following OP’s lead. For a company of Tradeka’s size, the interest payment on profit shares is mere pocket change, as you mentioned. The interest could be linked, for example, to Tradeka’s portfolio return.
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Of course, such a connection does not officially exist. But for some strange reason, Tradeka’s profit share targets are always published after OP’s, and they are consistently 0.25% higher than OP’s year after year.
According to OP, “we aim to pay a return on profit shares of at least 1-2 percentage points above the average interest rate of the Finnish government’s 10-year benchmark bond. A maximum of 30 percent of OP Group’s profit can be paid as return.” In my opinion, Tradeka should also clarify its return targets in a similar way.
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These proposals should be brought forward to Tradeka’s board, for example, through a member initiative.
Here is an example of an initiative related to raising the upper limit:
https://www.tradeka.fi/jasenaloite/tuotto-osuusmerkinnat-100-000-euroon
I made a member initiative on this topic on 16.2.2023 titled “Raising the target return for profit shares,” which also proposed clarifying the criteria for the target return. The initiative would have required 200 endorsements to be considered by the board. 48 names were collected. The content of the initiative was:
Tradeka’s profit share offered to its members is a unique investment form. In addition to Tradeka, there is only one other large cooperative in Finland that any fully competent Finn can join as a member and subscribe to profit shares. In terms of the targeted and realized return in recent years, Tradeka has been a better-yielding investment option compared to its benchmark with its 3.5% target return. Now, however, the situation has changed with rising interest rates. Alongside Tradeka, the other cooperative offering profit shares defines its target return with a clear percentage and an aim to pay “at least 1-2 percentage points above the average interest rate of the Finnish government’s 10-year benchmark bond.” We, the undersigned, propose that Tradeka raises the target return for profit shares to 5% and at least to a level that exceeds the average interest rate of the Finnish government’s 10-year benchmark bond by 1-2 percentage points.
For comparison, now in August, some smart aleck opened a member initiative according to which every member should be equally distributed 150 euros per year without having to invest a single euro in the cooperative, “because there is money.” That initiative easily gathered over 200 endorsements.
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It’s worth initiating initiatives when Oma Tradeka has the most traffic. Visitors are most numerous during the member vote for the charity target in August and September. According to the board, they read initiatives even if the number of votes does not exceed 200. Few people start digging up initiatives from 2023.
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That might be true. On the other hand, during the member votes for charity targets, initiatives easily get lost in the crowd.
I have noticed that profit shares do not particularly excite Tradeka’s members. And sometimes when there has been discussion about these on the cooperative’s social media pages, many people’s attitude is such that it’s a way for the privileged to plunder the members’ wealth. Considering Tradeka’s ideological roots, this attitude is not surprising. Nor is it surprising, referring to my previous message, that initiatives demanding investment returns without invested capital gain support.
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The cooperative’s board agrees with the goal presented in the member initiative to expand the cooperative’s member benefits to include such advantages that can be equally utilized by the cooperative’s members, regardless of their place of residence, for example. Furthermore, the cooperative’s board states that the cooperative uses an investment share (tuotto-osuus), for which the cooperative aims to pay a competitive interest annually from its surplus, amounting to 4.75% for 2023.
The investment share (tuotto-osuus) is probably the board’s answer to that 150 euro annual money distribution. Of course, it would be great to get data on how many of the restaurant vouchers distributed in late summer, for example, remain unused. If enough people miss out on this “profit distribution,” then there would be a certain prerequisite for interest payment, even though the interest will inevitably remain small with the capital being 33.64 euros.
For many old members, the current Tradeka is quite unfamiliar. It is an owner cooperative instead of the old consumer cooperative. Some also long for daily grocery shopping. Hopefully, Tradeka will attract members who believe in ownership. The membership fee is easily recouped within a year, and the membership fee is paid only once.
That 150 euro demand initiative is still active. The board’s response was to the initiative “Tradeka’s surplus should also be distributed as money to members annually”, which had no proposals regarding the amount.
I would see those restaurant vouchers primarily as marketing. It’s funny, by the way, that some member initiative complained about them too, how difficult they are to use, and therefore Tradeka should offer free coffee packages in SOK stores instead. It’s a bit like complaining to Citymarket that I don’t use your services, so I want free products from Keskola as compensation from Prisma 
That’s right. And when you leave the membership, you get it back.
That’s true, but I actually meant that many Restel restaurants have closed down in many localities. That’s why it can be difficult for some to access these services. In addition to vouchers, there’s an annual benefit. Restel’s share of the annual benefits is certainly the most significant.
That’s true, but it’s going to the board. I predict that the answer will be similar.
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The target for Tradeka’s yield share is a 4.75% interest rate next year:
“The membership has responded well to the opportunity to subscribe to the yield shares. In total, yield shares worth approximately ten million euros have been subscribed. Some have subscribed the maximum amount at once, but many members have found the yield share to be a form of long-term saving and they make subscriptions regularly,” says Perttu Puro, CEO of Cooperative Tradeka.
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It is, of course, a matter of opinion what constitutes “well”. Tradeka’s profit shares have been on the market for almost six years, so in my opinion, ten million in subscriptions is not a very impressive achievement. Especially since some of the shares have certainly already been terminated along the way.
For comparison, Tampereen Seudun Osuuspankki (Tampere Region Cooperative Bank) last opened a new profit share offering in January 2022. Its size was 10 million euros, and it was fully subscribed in about a week.
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Tradeka’s net amount of profit shares was 6.3 million euros at the end of 2023. It is indeed interesting if Puro is commenting on the subscription amount here without considering the terminated shares. I myself have terminated most of the shares, and the money will be returned by the end of the year.
Tradeka’s management probably hoped for greater demand for the profit shares. The original intention was likely that the entire amount would have been subscribed in the first year.
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In mid-January, when I was subscribing to profit shares, the number of profit shares was just over 83 thousand. It’s unlikely that many new subscriptions would have come in between the turn of the year and that time, so one could conclude that profit shares worth over 8 million euros had been subscribed by then, and less than a quarter of them had been redeemed.
And yes, greater demand was certainly expected, as the maximum limit for profit shares was, if I recall correctly, 30k euros. From there, it then rose to 50k euros.
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The 2019 offering lasted until the end of that year. Subscriptions were made for 2 million euros out of a 20 million offering. The current valid offering was launched at the beginning of 2020 and no end date has been set for it. The original idea was probably that the offering would have been fully subscribed in the first year.
Tradeka apparently managed to process the member initiatives that gathered the required number of supporters:
So, in response to those who wish for investment returns without invested capital, invest and you will get returns.
And in response to those who demand a 30% restaurant discount, this is not a charity whose purpose is to sell food at a loss.
Well, I exaggerated the content of the response a bit, but that’s roughly the main message. And it’s a perfectly valid message.
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The board’s response placed quite a lot of emphasis on benefit vouchers in connection with profit distribution. It also seems that efforts are being made to send out the vouchers earlier than currently. In Pori too, Restel’s restaurant options are starting to decrease as Rax is being shut down, so it would be good if these were given extra time. If these vouchers cannot be called profit distribution, then they are a kind of real dividends, whose redemption is considerably easier than hunting for refreshments at public company general meetings. Restel would now need a positive turnaround. Otherwise, it will become a burden that practically cannot be given up, as it is the most important source of benefits.
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Metsä Group’s Board of Directors proposes a one percentage point decrease in interest rates:
Metsäliitto Cooperative’s Board of Directors has decided to propose that for the statutory basic shares invested by members, an interest of 5.5% (6.5% for 2023) will be paid for the year 2024, for Metsä1 additional shares 5.0% (6.0), for additional share capital A 2.0% (3.0), and for additional share capital B 1.0% (1.0). In addition, the Board proposes that a surplus refund of 0.30 euros per cubic meter of industrial roundwood received from a member during the previous four concluded financial years be distributed.
Tradeka’s profit share interest for 2024 is 5.75%. It surpassed all of these.
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According to Iltalehti, Tradeka cooperative is involved in the Helsinki Hall deal:
According to information obtained by Iltalehti, Trevian Kasvu LP Ky will pay 60 million euros for the multi-purpose arena.
Of this sum, 40 million euros is money guaranteed by Osuuskunta Tradeka.
So possibly the arrangement is as follows: the buyers put 20 million euros of their own capital into the deal, and 40 million euros is a loan taken from some party, which Tradeka has committed to guarantee, i.e., pay if the buyers are unable to.
Based on this information, it is likely that Restel Oy will be the arena’s restaurant operator.
Here is the official press release about the financing arrangement, in which Tradeka is involved:
Paasitorni’s restaurant services will be transferred to Restel:
Paasitorni’s restaurant world includes four distinct restaurants – Paasiravintola, Paasin Kellari, Meripaviljonki, and Juttutupa with its event spaces, formerly known as Graniittilinna.
I’m updating that Restel is opening restaurants in Helsinki Hall:
New restaurants
Restel is responsible for the hall’s restaurant operations, with the goal of bringing Burger King, Taco Bell, and Rax to the arena in the first phase.
– The goal is that food and drinks could be sold and delivered to all 15,000 seats in the hall, says Perttu Puro, CEO of Tradeka-Yhtiöt Oy.
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Tradeka has published its 2024 results:
“The investment year was good despite poorly performing real estate investments. Tradeka Investments’ portfolio return was 7.8%. Our portfolio maintained a risk level consistent with the basic allocation throughout the year. The liquid portfolio lagged the index due to the weak relative return of the equity portfolio, but the fixed income portfolio clearly beat the index,” says Puro.
For the profit shares, the Board of Directors of Cooperative Tradeka proposes a 5.75% interest payment, in line with the target return. The target return for this year has already been set at 4.75%.
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Tradeka’s representative body confirmed a 5.75% interest rate to be paid on profit shares for last year:
I reached the maximum subscription amount for profit shares at the end of April, and the serial number of the last profit share was around 114,000. Looking back a year from that, approximately 22,000 profit shares have been subscribed. So, that profit share offering is not coming to an end anytime soon at this pace.
I’ve been trying to keep an eye on the local OP’s next profit share offering for quite some time, but it has been quiet on that front.
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