OP Yrityspankki Oyj - Interim report (Q1 and Q3)

OP Corporate Bank plc's Interim Report for 1 January-30 September 2017

OP Corporate Bank plc
Interim Report for 1 January-30 September 2017
1 November 2017 at 9.00 am EET


OP Corporate Bank plc's Interim Report for 1 January-30 September 2017

  * Consolidated earnings before tax were EUR 392 million (400). The return on
    equity was 10.4% (11.1).
  * Banking earnings before tax increased to EUR 256 million (189) due to higher
    net investment income and net interest income. The loan portfolio increased
    in the year to September by 11.0% to EUR 19.4 billion. The cost/income ratio
    was 30.8% (34.6).
  * Non-life Insurance earnings before tax decreased to EUR 125 million (199).
    Bringing forward the plan to reduce the discount rate as well as
    unfavourable claims development during the first three quarters weakened net
    insurance income and the operating combined ratio, which was 97.0% (86.5).
    Net return on investments at fair value totalled EUR 119 million (18).
  * Other Operations earnings before tax were EUR 11 million (11). Liquidity and
    access to funding remained good.
  * The CET1 ratio was 14.5% (14.9), while the target is 15%.
  * Timo Ritakallio, LL.M., MBA and D.Sc. (Tech.), has been appointed OP
    Financial Group's new President and Group Executive Chairman. Following the
    appointment, he will become Chair of the Board of Directors of OP Corporate
    Bank. He will take up his duties in March 2018.
  * Change in the outlook: OP Corporate Bank Group's consolidated earnings
    before tax are expected to be about the same as (previously: about the same
    as or lower than) in 2016.


                                  Q1-3/2017 Q1-3/2016 Change, % Q1-4/2016
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 Earnings before tax, EUR million
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   Banking                              256       189      35.4       260
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   Non-life Insurance                   125       199     -37.5       231
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   Other Operations                      11        11       1.8        13
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 Group total                            392       400     -21.9       504
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Comparatives deriving from the income statement are based on figures reported
for the corresponding period a year ago. Unless otherwise specified, balance-
sheet and other cross-sectional figures on 31 December 2016 are used as
comparatives.

 Financial targets                30 Sept. 2017 31 Dec. 2016             Target
-------------------------------------------------------------------------------
 Customer experience, NPS (-                 67
 100-+100)                                                58   70, over time 90
-------------------------------------------------------------------------------
 Common Equity Tier 1 (CET1)
 ratio, %                                  14.5         14.9                 15
-------------------------------------------------------------------------------
 Return on economic capital, %             16.4         17.0                 22
-------------------------------------------------------------------------------
                                                               Expenses in 2020
 Expenses of present-day                                     lower than in 2015
 business*, EUR million                     513          471              (475)
-------------------------------------------------------------------------------
 Dividend payout ratio, %                     -         50.4                 50
-------------------------------------------------------------------------------


*Excluding expenses of the health and wellbeing business





Outlook towards the year end

The world economy showed favourable development during the third quarter. The
euro-area economy has grown at a brisker pace than expected, but the inflation
rate has remained moderate and the interest rate outlook has remained low. The
Finnish economy continued to grow strongly and on a broad basis. Economic
sentiment is still improving. Improvement in employment will support consumer
confidence and better business profitability will increase fixed investments.
Favourable economic development is expected to continue in the near future.
Geopolitical risks,in particular, are casting a shadow over the outlook. In
Finland, the risk is that a longer-term economic growth will remain modest if
adequate reforms that support an increase in the employment rate cannot be
implemented.

The financial sector has adjusted rather well to the new type of low interest
rate environment. While low interest rates have retarded growth in banks' net
interest income and eroded insurance institutions' income from fixed income
investments, they also have improved customers' repayment capacity. Impairment
losses have remained low despite the slow growth that has lasted for several
years now. The most significant strategic risks in the financial sector are
currently associated with changing customer behaviour, operating environment
digitisation and more complex regulation. Industry disruption is threatening to
slow down growth and erode income generation in the years to come. In the next
few years, the financial sector will be faced with a strong need to reinvent
itself. Changes in the operating environment will emphasise the necessity of
reinvention with a long-term approach as well as the role of the management of
profitability and capital adequacy.

OP Corporate Bank Group's consolidated earnings before tax are expected to be
about the same as (previously: about the same as or lower than) in 2016. The
most significant uncertainties affecting earnings relate to changes in the
interest rate and investment environment, impairment loss on receivables, the
rate of business growth and the effect of large claims on claims expenditure.

All forward-looking statements in this report expressing the management's
expectations, beliefs, estimates, forecasts, projections and assumptions are
based on the current view of the future development in the operating environment
and the future financial performance of OP Corporate Bank Group and its various
functions, and actual results may differ materially from those expressed in the
forward-looking statements.

Helsinki, 1 November 2017



OP Corporate Bank plc
Board of Directors



Financial reporting in 2018

OP Corporate Bank plc publishes the following financial information pursuant to
the regular disclosure obligation of a securities issuer:

Schedule for Financial Statements Bulletin for 2017 and Interim Reports in 2018:

Financial Statements Bulletin 2017               8 February 2018
Interim Report Q1/2018                               3 May 2018
Interim Report H1/2018                                1 August 2018
Interim Report Q1-3/2018                            31 October 2018



DISTRIBUTION
Nasdaq Helsinki Ltd
London Stock Exchange
SIX Swiss Exchange
Major media
www.op.fi



For additional information, please contact
Jouko Pölönen, President and CEO, tel. +358 (0)10 253 2691
Carina Geber-Teir, Executive Vice President, Corporate Communications, tel.
+358 (0)10 252 8394

OP Corporate Bank is part of the leading Finnish customer-owned financial
services group, OP Financial Group. OP Corporate Bank and OP Mortgage Bank are
responsible for OP's funding in money and capital markets. As laid down in the
applicable law, OP Corporate Bank, OP Mortgage Bank and their parent company OP
Cooperative and other OP Financial Group member credit institutions are
ultimately jointly and severally liable for each other's debts and commitments.
OP Corporate Bank acts as OP's central bank.




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Attachments:

OP Corporate Bank plc Interim report Q3 2017.pdf