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2014-03-17 15:33:06 CET 2014-03-17 15:33:57 CET REGULATED INFORMATION Pohjola Pankki Oyj - Company AnnouncementPohjola updates its financial targetsPohjola Bank plc 17 March 2014, 4:30 pm Stock exchange release Pohjola updates its financial targets Pohjola Bank plc's Board of Directors confirmed Pohjola Group's updated financial targets on 17 March 2014. The Core Tier 1 ratio of 11% (CT1) was replaced by the Common Equity Tier 1 ratio of 15% (CET1). Pohjola also revised its dividend policy in such a way that the dividend payout ratio is at least 50%, provided that the CET1 is at least 15%. The dividend payout ratio will be 30% for the financial year 2014 and onwards until Pohjola achieves the new CET1 target ratio. The solvency ratio target of 70% set for Non-life Insurance was replaced by the 120% solvency ratio target under Solvency II. Other financial targets remained unchanged. The new capital adequacy target must be achieved on a front-loaded basis by the end of 2016 and other financial targets by the end of 2015. The higher capital adequacy target results from the tighter regulatory framework, uncertainty related to the treatment of insurance holdings after 2014 and the decision made on 5 February 2014 by OP-Pohjola Group Central Cooperative's Supervisory Board to increase the capital adequacy target for OP- Pohjola Group's Banking from 15% (CT1) to 18% (CET1). OP-Pohjola Group must meet the CET1 target, based on the highest-quality form of capital, by the end of 2016. The aim is to maintain a solid capital base that creates competitive edge and stability. Strengthening the capital base and managing risk-weighted assets form the key to the achievement of the new CET1 target. When it comes to strengthening the capital base, an increase in earnings and dividends paid by Pohjola Insurance Ltd to Pohjola Bank plc and the lower dividend payout ratio will play a key role. Developing credit-risk models will play a key role in the management of risk-weighted assets. ------------------------------------------------------------------------------- Pohjola Group's financial targets Target Reported in 2013 ------------------------------------------------------------------------------- Group Return on equity, % 13 14.6 CET1, % 15 11.9* Banking Operating cost/income ratio, % < 35 36 Non-life Insurance Operating combined ratio, % < 92 86.9 Operating expense ratio, % 18 18.7 Solvency ratio (Solvency II), % 120 125** Asset Management Operating cost/income ratio, % < 45 53 Total expenses 2015-end total expenses at the same level as at the 569 580 end of 2012 ------------------------------------------------------------------------------- * 1 January 2014 ** Pro forma, Solvency II regulations are still partly unfinished In addition, Pohjola still aims at an AA credit rating affirmed by at least two credit rating agencies or at credit ratings that are at least at the level of its main competitors. Pohjola Bank plc Carina Geber-Teir Chief Communications Officer DISTRIBUTION NASDAQ OMX Helsinki LSE London Stock Exchange SIX Swiss Exchange Major media pohjola.com, op.fi FOR MORE INFORMATION, PLEASE CONTACT: Vesa Aho, CFO, tel. +358 (0)10 252 2336 Niina Pullinen, Senior Vice President, Investor Relations, tel. +358 (0)10 252 4494 Pohjola is a Finnish financial services group which provides its customers with banking, non-life insurance and asset management services. Our mission is to promote the sustainable prosperity, security and wellbeing of our customers. Profitable growth and an increase in company value form our key objectives. Pohjola Group serves corporate customers in Finland and abroad by providing an extensive range of financial, investment, cash-management and non-life insurance services. The Group offers non-life insurance and private banking services to private customers. Pohjola Series A shares have been listed on the Large Cap List of the NASDAQ OMX Helsinki since 1989. The number of shareholders totals around 32,000. Pohjola's consolidated earnings before tax amounted to 473 million euros in 2013 and the balance sheet total amounted to 44 billion euros on 31 December 2013. Pohjola is part of OP-Pohjola Group, the leading financial services group in Finland with 4.3 million customers. www.pohjola.com [HUG#1769246] |
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