2017-04-27 09:00:35 CEST
2017-04-27 09:00:35 CEST
REGULATED INFORMATION
OP Mortgage Bank - Interim report (Q1 and Q3)
OP Mortgage Bank: Interim Report for 1 January-31 March 2017
OP MORTGAGE BANK Interim Report 27 April 2017 at 10.00 am EEST OP Mortgage Bank: Interim Report for 1 January-31 March 2017 OP Mortgage Bank (OP MB) is part of OP Financial Group and its role is to raise, together with OP Corporate Bank plc, funding for the Group from money and capital markets. OP MB is responsible for the Group's funding for the part of covered bond issuance. Financial standing The intermediate loans and loan portfolio of OP MB increased to EUR 11,427 million (10,892)* during the reporting period. In March, OP MB issued a fixed- rate covered bond with a maturity of seven years in international capital markets. OP MB intermediated the bond with a nominal value of EUR 1,000 million in intermediate loans in its entirety to OP cooperative banks. On 31 March 2017, 95 OP cooperative banks had a total of EUR 2,853 million (1,853) in intermediate loans from OP MB. The company's financial standing remained stable throughout the reporting period. Operating profit for January- March amounted to EUR 4.4 (5.4) million. OP MB has used interest rate swaps to hedge against its interest rate risk. Interest rate swaps have been used to swap housing loan interest, intermediate loan interest and interest on issued bonds into the same basis rate. OP MB has entered into all derivative contracts for hedging purposes, with OP Corporate Bank plc being their counterparty. *The comparatives for 2016 are given in brackets. For income statement and other aggregated figures, January-March 2016 figures serve as comparatives. For balance-sheet and other cross-sectional figures, figures at the end of the previous financial year (31 December 2016) serve as comparatives. Collateralisation of bonds issued to the public On 31 March 2017, loans as collateral in security of the covered bonds issued under the Euro Medium Term Covered Note programme worth EUR 15 billion established on 12 November 2010 under the Laki kiinnityspankkitoiminnasta (688/2010) (Covered Bond Act) totalled EUR 10,991 million. Capital adequacy OP MB has presented its capital base and capital adequacy in accordance with the EU capital requirement regulation and directive (EU 575/2013). OP MB uses the Internal Ratings Based Approach (IRBA) to measure its capital adequacy requirement for credit risk. OP MB uses the Standardised Approach to measure its capital adequacy for operational risk. The Common Equity Tier 1 (CET1) ratio stood at 112.2 % (109.5) on 31 March 2017. The CET1 capital requirement is 4.5% and the requirement for the capital conservation buffer is 2.5%, i.e. the total CET1 capital requirement is 7%. The minimum total capital requirement is 8% and 10.5% with increased capital conservation buffer. OP MB's highest minimum capital requirement is determined by the Basel I floor. OP MB's capital base exceeded the Basel I floor by EUR 45.5 million in March. Information on the Basel I floor and capital surplus can be found in note "Capital base and capital adequacy". The Financial Supervisory Authority has decided to prepare a 15% minimum risk weight for home loans, in an effort, according to the Authority, to prepare for an intermediate-term systemic risk. OP MB's loan portfolio consists of low-risk home loans, on which the Authority's possible decision will relatively have the strongest impact. Based on an assessment, OP MB's capital adequacy will, however, remain solid even after the entry into force of the floor and be clearly above the minimum requirements set by the authorities; the minimum level of capital will continue to be determined according to the Basel I floor even after the setting of the floor. The Authority seeks to adopt the minimum risk weight at the beginning of 2018. Joint and several liability of amalgamation Under the Act on the Amalgamation of Deposit Banks, the amalgamation of the cooperative banks comprises the organisation's central cooperative (OP Cooperative), the central cooperative's member credit institutions and the companies belonging to their consolidation groups as well as credit and financial institutions and service companies in which the above together hold more than half of the total votes. This amalgamation is supervised on a consolidated basis. On 31 March 2017, OP Cooperative's members comprised 172 member cooperative banks as well as OP Corporate Bank plc, OP Mortgage Bank, OP Card Company Plc and OP Process Services Ltd. The central cooperative is responsible for issuing instructions to its member credit institutions concerning their internal control and risk management, their procedures for securing liquidity and capital adequacy as well as for compliance with harmonised accounting policies in the preparation of the amalgamation's consolidated financial statements. As a support measure referred to in the Act on the Amalgamation of Deposit Banks, the central cooperative is liable to pay any of its member credit institutions an amount that is necessary to prevent the credit institution from being placed in liquidation. The central cooperative is also liable for the debts of a member credit institution which cannot be paid using the member credit institution's assets. Each member bank is liable to pay a proportion of the amount which the central cooperative has paid to either another member bank as part of support action or to a creditor of such member bank in payment of an amount overdue which the creditor has not received from the member bank. Furthermore, in the case of the central cooperative's default, a member bank has unlimited refinancing liability for the central cooperative's debts as referred to in the Co-operatives Act. Each member bank's liability for the amount the central cooperative has paid to the creditor on behalf of a member bank is divided between the member banks in proportion to their last adopted balance sheets. OP Financial Group's insurance companies do not fall within the scope of joint and several liability. According to Section 25 of the Covered Bond Act, the holder of a covered bond has the right to receive a payment for the entire term of the bond from the assets entered as collateral before other receivables without this being prevented by OP MB's liquidation or bankruptcy. Personnel On 31 March 2017, OP MB had five employees. The Bank purchases all the most important support services from OP Cooperative and its Group members, reducing the need for its own personnel. Administration The Board composition is as follows: Chairman Harri Luhtala Chief Financial Officer, OP Cooperative Members Elina Ronkanen-Minogue Head of Asset and Liability Management and Group Treasury, OP Cooperative Hanno Hirvinen Group Treasurer, OP Corporate Bank plc OP MB's Managing Director is Lauri Iloniemi and Hanno Hirvinen is his deputy. Risk exposure The most typical types of risks related to OP MB are credit risk, structural funding risk, liquidity risk and interest rate risk. The key credit risk indicators in use show that OP MB's credit risk exposure is stable and the limit for liquidity risk set by the Board of Directors has not been exceeded. The liquidity buffer for OP Financial Group, managed by OP Corporate Bank plc, is exploitable by OP MB. OP MB has used interest rate swaps to hedge against its interest rate risk. Interest rate swaps have been used to swap housing loan interest, intermediate loan interest and interest on issued bonds into the same basis rate. The interest rate risk of OP MB may be considered to be low. Outlook It is expected that the bank's capital adequacy will remain strong, risk exposure favourable and the overall quality of the loan portfolio good. This will make it possible to issue new covered bonds in 2017. Accounting policies The Interim Report for 1 January-31 March 2017 has been prepared in accordance with IAS 34 (Interim Financial Reporting). This Interim Report is based on unaudited figures. Given that all figures have been rounded off, the sum total of individual figures may deviate from the presented sums. The Interim Report is available in Finnish and English. The Finnish version is official that will be used if there is any discrepancy between the language versions. OP MB's related parties include the parent company OP Cooperative and its subsidiaries, the OP Financial Group pension insurance companies OP Bank Group Pension Fund and OP Bank Group Pension Foundation, and the company's administrative personnel. Standard loan terms and conditions are applied to loans granted to the related parties. Loans are tied to generally used reference interest rates. The financial year saw no major changes in related-party transactions. The income statement layout grouping has been updated for the Interim Report 1 January-30 September 2016. Comparatives have been restated to correspond to the new grouping. New standards and interpretations IFRS 9 Financial Instruments OP MB will for the first time apply IFRS 9 as of 1 January 2018. The quantitative effect of the application of the standard on the 2018 financial statements cannot yet be assessed reliably since it will depend on the amount of the financial instruments held at that time, the financial position at that time and the choice of the calculation principles and management judgement. The new standard requires that OP MB analyse the calculation and monitoring processes for financial instruments, with the related changes being made are not yet completed. OP MB has made a preliminary assessment of the effects of the adoption of IFRS 9, as follows: Classification and measurement The classification of financial instruments under IFRS 9 is based on both the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. In case the objective of the debt instrument held within the portfolio business model is to hold assets in order to collect contractual cash flows or the objective is achieved by collecting contractual cash flows and selling financial assets, the classification is based on the contractual cash flow characteristics. In such a case, contractual cash flows that are solely payments of principal and interest on the principal amount outstanding are in line with a basic lending arrangement. Under IFRS 9, these financial assets are amortised cost or at fair value through other comprehensive income (FVOCI). The majority of OP MB's financial assests under debt instruments are included in the abovementioned portfolios. Impairment The expected credit loss is calculated on all balance sheet items amortised at cost and those recognised at fair value through other comprehensive income (FVOCI) and on off-balance-sheet loan commitments. OP MB's credit risk models and the development of related systems are still underway. The expected credit loss is calculated using modelled risk parameters and formula PDxLGDxEAD for the majority of the portfolios. The expected credit loss is calculated for 12 months or lifetime, depending on whether the instrument's credit risk on the reporting day has increased significantly from the original one. OP MB is planning to assess an increase in credit risk for lifetime through PD change. In addition, credit risk has increased significantly if payment is over 30 days past due. In the definition of default, OP MB uses a uniform definition in capital adequacy measurement. OP MB will include forward-looking information and macroeconomic scenarios in the model. The macroeconomic scenarios are the same that OP MB uses otherwise in its financial annual planning. Expected credit loss provisions under IFRS 9 are assessed to increase significantly from its current level based on IAS 39 and it varies by portfolio. The provisions will reduce equity capital on the date of transition. Based on preliminary assessments, the increase in expected credit loss provisions is not expected to have any significant effect on OP MB's CET1 ratio because the IFRS 9 compliant expected credit loss provisions are not expected to exceed the expected loss calculated in capital adequacy and the effect of used floors. Furthermore, the amendment to the Capital Requirements Regulation (CRR), proposed by the European Commission in November 2016, involves the possibility to gradually phase in the effects of impairment loss measurement under IFRS 9 in the calculation of the CET1 ratio. Hedge accounting For portfolio hedges, OP MB will continue to apply hedge accounting under IAS 39. OP MB has not yet made the decision to adopt IFRS 9 compliant hedge accounting. Transitional provisions OP MB will utilise the opportunity permitted by IFRS 9 not to restate comparative periods in classification and recognition (incl. impairment) in respect of the amendments. Retained earnings will be restated through the amendments as of 1 January 2018. Formulas for Alternative Performance Measures The Alternative Performance Measures Guidelines issued by the European Securities and Markets Authority (ESMA) came into force on 3 July 2016. The Alternative Performance Measures are presented to illustrate the financial performance of business operations and to improve comparability between reporting periods. They should not be considered to be replacements for the performance measures defined in IFRS governing financial reporting. The formulas for the used Alternative Performance Measures are presented below and they correspond to the previously presented performance indicators in terms of content. Return on equity (ROE), % = Annualised profit for the period / Equity capital (average equity capital at the beginning and end of the period) × 100 Cost/income ratio, % = (Personnel costs + Depreciation/amortisation and impairment loss + Other operating expenses) / (Net interest income + Net commission and fees + Net investment income + Other operating income) × 100 +---------------------------------------------+-------+-------+----------+ |Income statement, TEUR |Q1/2017|Q1/2016|Q1-Q4/2016| +---------------------------------------------+-------+-------+----------+ |Net interest income | 18,156| 18,866| 76,171| +---------------------------------------------+-------+-------+----------+ | Interest income | 17,713| 24,300| 84,978| +---------------------------------------------+-------+-------+----------+ | Interest expenses | -443| 5,434| 8,807| +---------------------------------------------+-------+-------+----------+ |Net commissons and fees |-12,393|-12,156| -47,757| +---------------------------------------------+-------+-------+----------+ |Net investment income | 1| 2| 7| +---------------------------------------------+-------+-------+----------+ |Other operating income | 1| 1| 22| +---------------------------------------------+-------+-------+----------+ |Total income | 5,765| 6,713| 28,443| +---------------------------------------------+-------+-------+----------+ |Personnel costs | 93| 89| 321| +---------------------------------------------+-------+-------+----------+ |Depreciation/amortisation and impairment loss| 209| 209| 836| +---------------------------------------------+-------+-------+----------+ |Other operating expenses | 1,102| 956| 4,243| +---------------------------------------------+-------+-------+----------+ |Total expenses | 1,404| 1,254| 5,400| +---------------------------------------------+-------+-------+----------+ |Impairment loss on receivables | 80| -67| -400| +---------------------------------------------+-------+-------+----------+ |Earnings before tax | 4,441| 5,392| 22,643| +---------------------------------------------+-------+-------+----------+ |Income tax expense | 888| 1,078| 4,566| +---------------------------------------------+-------+-------+----------+ |Profit for the period | 3,553| 4,313| 18,077| +---------------------------------------------+-------+-------+----------+ +-------------------------------------------------+-------+-------+----------+ |Statement of comprehensive income, TEUR | | | | | | | | | | |Q1/2017|Q1/2016|Q1-Q4/2016| +-------------------------------------------------+-------+-------+----------+ | | | | | +-------------------------------------------------+-------+-------+----------+ |Profit for the period | 3,553| 4,313| 18,077| +-------------------------------------------------+-------+-------+----------+ | | | | | +-------------------------------------------------+-------+-------+----------+ |Items that will not be reclassified to profit | | | | |or loss | | | | +-------------------------------------------------+-------+-------+----------+ |Gains/(losses) arising from remeasurement of | | | | |defined benefit plans | | | -138| +-------------------------------------------------+-------+-------+----------+ |Income tax on gains/(losses) on arising from | | | | |remeasurement of defined benefit plans | | | 28| +-------------------------------------------------+-------+-------+----------+ |Total comprehensive income | 3,553| 4,313| 17,967| +-------------------------------------------------+-------+-------+----------+ +-------------------------+-------+-------+----------+ |Key ratios |Q1/2017|Q1/2016|Q1-Q4/2016| +-------------------------+-------+-------+----------+ |Return on equity (ROE), %| 3.8| 4.7| 4.8| +-------------------------+-------+-------+----------+ |Cost/income ratio, % | 24| 19| 19| +-------------------------+-------+-------+----------+ +---------------------------------------------------------+----------+---------+ |Cash flow | | | |from operating activities, TEUR | Q1/2017| Q1/2016| +---------------------------------------------------------+----------+---------+ |Profit for the financial year | 3,553| 4,313| +---------------------------------------------------------+----------+---------+ |Adjustments to profit for the financial year | 2,817| 2,305| +---------------------------------------------------------+----------+---------+ |Increase (-) or decrease (+) | | | |in operating assets | -548,394| 16,088| +---------------------------------------------------------+----------+---------+ |Receivables from credit institutions |-1,000,000| | +---------------------------------------------------------+----------+---------+ |Receivables from the public and public-sector entities | 465,039| 33,771| +---------------------------------------------------------+----------+---------+ |Other assets | -13,433| -17,683| +---------------------------------------------------------+----------+---------+ |Increase (+) or decrease (-) | | | |in operating liabilities | -818,083| 804,248| +---------------------------------------------------------+----------+---------+ |Liabilities to credit institutions and | | | |central banks | -830,000| 790,000| +---------------------------------------------------------+----------+---------+ |Other liabilities | 11,917| 14,248| +---------------------------------------------------------+----------+---------+ | | | | +---------------------------------------------------------+----------+---------+ |Income tax paid | -1,251| -921| +---------------------------------------------------------+----------+---------+ |Dividends received | 1| 2| +---------------------------------------------------------+----------+---------+ |A. Net cash from operating activities |-1,361,356| 826,955| +---------------------------------------------------------+----------+---------+ |Cash flow from investing activities | | | +---------------------------------------------------------+----------+---------+ |B. Net cash used in investing activities | | | +---------------------------------------------------------+----------+---------+ |Cash flow from financing activities | | | +---------------------------------------------------------+----------+---------+ |Increases in debt securities issued | | | |to the public | 992,263| | +---------------------------------------------------------+----------+---------+ |Dividends paid and interest on cooperative capital | -9,038| -16,282| +---------------------------------------------------------+----------+---------+ |C. Net cash used in financing activities | 983,225| -16,282| +---------------------------------------------------------+----------+---------+ |D. Effect of foreign exchange rate changes on cash and | | | |cash equivalents | | 0| +---------------------------------------------------------+----------+---------+ |Net change in cash and cash equivalents (A+B+C+D) | -378,132| 810,673| +---------------------------------------------------------+----------+---------+ |Cash and cash equivalents at year-start | 451,787| 245,120| +---------------------------------------------------------+----------+---------+ |Cash and cash equivalents at year-end | 73,864|1,056,002| +---------------------------------------------------------+----------+---------+ |Change in cash and cash equivalents | -377,923| 810,882| +---------------------------------------------------------+----------+---------+ |Interest received | 9,089| 6,564| +---------------------------------------------------------+----------+---------+ |Interest paid | -12,193| -8,966| +---------------------------------------------------------+----------+---------+ |Adjustments to profit for the financial year | | | +---------------------------------------------------------+----------+---------+ |Non-cash items | | | +---------------------------------------------------------+----------+---------+ |Unrealised net gains on foreign exchange operations | | 0| +---------------------------------------------------------+----------+---------+ |Impairment losses on receivables | -80| 68| +---------------------------------------------------------+----------+---------+ |Other | 2,898| 2,237| +---------------------------------------------------------+----------+---------+ |Total adjustments | 2,817| 2,305| +---------------------------------------------------------+----------+---------+ |Cash and cash equivalents | | | +---------------------------------------------------------+----------+---------+ |Receivables from credit institutions payable on demand | 73,864|1,056,002| +---------------------------------------------------------+----------+---------+ |Total cash and cash equivalents | 73,864|1,056,002| +---------------------------------------------------------+----------+---------+ +------------------------------------------+-----------+-----------+-----------+ |Balance sheet, TEUR |31 Mar 2017|31 Mar 2016|31 Dec 2016| +------------------------------------------+-----------+-----------+-----------+ |Receivables from credit institutions | 2,926,634| 1,799,372| 2,304,556| +------------------------------------------+-----------+-----------+-----------+ |Derivative contracts | 181,599| 273,010| 220,461| +------------------------------------------+-----------+-----------+-----------+ |Receivables from customers | 8,574,074| 9,576,120| 9,039,563| +------------------------------------------+-----------+-----------+-----------+ |Investments assets | 40| 40| 40| +------------------------------------------+-----------+-----------+-----------+ |Intangible assets | 1,531| 2,366| 1,739| +------------------------------------------+-----------+-----------+-----------+ |Other assets | 69,644| 96,506| 56,212| +------------------------------------------+-----------+-----------+-----------+ |Tax assets | 823| | 460| +------------------------------------------+-----------+-----------+-----------+ |Total assets | 11,754,344| 11,747,413| 11,623,031| +------------------------------------------+-----------+-----------+-----------+ |Liabilities to credit institutions | 1,058,000| 2,165,000| 1,888,000| +------------------------------------------+-----------+-----------+-----------+ |Derivative contracts | 17,299| 6,202| 6,233| +------------------------------------------+-----------+-----------+-----------+ |Debt securities issued to the public | 10,221,615| 9,092,027| 9,277,801| +------------------------------------------+-----------+-----------+-----------+ |Provisions and other liabilities | 89,292| 122,733| 77,375| +------------------------------------------+-----------+-----------+-----------+ |Tax liabilities | 0| 1,483| | +------------------------------------------+-----------+-----------+-----------+ |Total liabilities | 11,386,207| 11,387,445| 11,249,409| +------------------------------------------+-----------+-----------+-----------+ |Shareholders' equity | | | | +------------------------------------------+-----------+-----------+-----------+ | Share capital | 60,000| 60,000| 60,000| +------------------------------------------+-----------+-----------+-----------+ | Reserve for invested unrestricted equity| 245,000| 245,000| 245,000| +------------------------------------------+-----------+-----------+-----------+ | Retained earnings | 63,137| 54,968| 68,622| +------------------------------------------+-----------+-----------+-----------+ |Total equity | 368,137| 359,968| 373,622| +------------------------------------------+-----------+-----------+-----------+ |Total liabilities and shareholders' equity| 11,754,344| 11,747,413| 11,623,031| +------------------------------------------+-----------+-----------+-----------+ +------------------------------------------+-----------+-----------+-----------+ |Off-balance-sheet commitments, TEUR |31 Mar 2017|31 Mar 2016|31 Dec 2016| +------------------------------------------+-----------+-----------+-----------+ |Irrevocable commitments given on behalf of| | | | |customers | 8| 205| 8| +------------------------------------------+-----------+-----------+-----------+ +-----------------------+-------------+--------------+-----------------+-------+ |Statement of changes in|Share capital|Other reserves|Retained earnings| Total| |equity, TEUR | | | | equity| +-----------------------+-------------+--------------+-----------------+-------+ | | | | | | +-----------------------+-------------+--------------+-----------------+-------+ |Shareholders' equity 1 | | | | | |Jan 2016 | 60,000| 245,000| 66,937|371,937| +-----------------------+-------------+--------------+-----------------+-------+ |Reserve for invested | | | | | |unrestricted equity | | | | | +-----------------------+-------------+--------------+-----------------+-------+ |Profit for the period | | | 4,313| 4,313| +-----------------------+-------------+--------------+-----------------+-------+ |Total comprehensive | | | | | |income | | | | | +-----------------------+-------------+--------------+-----------------+-------+ |Other changes | | | -16,282|-16,282| +-----------------------+-------------+--------------+-----------------+-------+ |Shareholders' equity | | | | | |31 Mar 2016 | 60,000| 245,000| 54,968|359,968| +-----------------------+-------------+--------------+-----------------+-------+ | | | | | | +-----------------------+-------------+--------------+-----------------+-------+ |Shareholders' equity 1 | | | | | |Jan 2017 | 60,000| 245,000| 68,622|373,622| +-----------------------+-------------+--------------+-----------------+-------+ |Reserve for invested | | | | | |unrestricted equity | | | | | +-----------------------+-------------+--------------+-----------------+-------+ |Profit for the period | | | 3,553| 3,553| +-----------------------+-------------+--------------+-----------------+-------+ |Total comprehensive | | | | | |income | | | | | +-----------------------+-------------+--------------+-----------------+-------+ |Other changes | | | -9,038| -9,038| +-----------------------+-------------+--------------+-----------------+-------+ |Shareholders' equity | | | | | |31 Mar 2017 | 60,000| 245,000| 63,137|368,137| +-----------------------+-------------+--------------+-----------------+-------+ OP MB has presented its capital base and capital adequacy in accordance with the EU capital requirement regulation and directive (EU 575/2013). +----------------------------------------------+-----------+-----------+ |Capital base and capital adequacy, TEUR |31 Mar 2017|31 Dec 2016| +----------------------------------------------+-----------+-----------+ | | | | +----------------------------------------------+-----------+-----------+ |Shareholders' equity | 368,137| 373,622| +----------------------------------------------+-----------+-----------+ |Common Equity Tier 1 (CET1) before deductions | 368,137| 373,622| +----------------------------------------------+-----------+-----------+ |Intangible assets | -1,531| -1,739| +----------------------------------------------+-----------+-----------+ |Excess funding of pension liability | -67| -67| +----------------------------------------------+-----------+-----------+ |Share of unaudited profits | -3,553| -18,077| +----------------------------------------------+-----------+-----------+ |Impairment loss - shortfall of expected losses| -2,883| -2,612| +----------------------------------------------+-----------+-----------+ |Common Equity Tier 1 (CET1) | 360,103| 351,126| +----------------------------------------------+-----------+-----------+ |Tier 1 capital (T1) | 360,103| 351,126| +----------------------------------------------+-----------+-----------+ |Total capital base | 360,103| 351,126| +----------------------------------------------+-----------+-----------+ | | | | +----------------------------------------------+-----------+-----------+ |Total risk exposure amount | | | +----------------------------------------------+-----------+-----------+ |Credit and counterparty risk | 280,341| 286,845| +----------------------------------------------+-----------+-----------+ |Operational risk | 40,554| 33,898| +----------------------------------------------+-----------+-----------+ |Total | 320,894| 320,743| +----------------------------------------------+-----------+-----------+ | | | | +----------------------------------------------+-----------+-----------+ |Key ratios, % | | | +----------------------------------------------+-----------+-----------+ |CET1 capital ratio | 112.2| 109.5| +----------------------------------------------+-----------+-----------+ |Tier 1 capital ratio | 112.2| 109.5| +----------------------------------------------+-----------+-----------+ |Capital adequacy ratio | 112.2| 109.5| +----------------------------------------------+-----------+-----------+ | | | | +----------------------------------------------+-----------+-----------+ |Basel I floor | | | +----------------------------------------------+-----------+-----------+ |Capital base | 360,103| 351,126| +----------------------------------------------+-----------+-----------+ |Basel I capital requirements floor | 314,653| 322,006| +----------------------------------------------+-----------+-----------+ |Capital buffer for Basel I floor | 45,450| 29,120| +----------------------------------------------+-----------+-----------+ +------------------------------------------------------------------------------+ |Classification of financial assets and liabilities 31 March 2017, TEUR | +-------------------+----------------+--------------+---------------+----------+ | | | Recognised at| | | | | | fair value| | | | |Loans and other|through profit| Available| | |Financial assets | receivables| or loss| for sale| Total| +-------------------+----------------+--------------+---------------+----------+ |Receivables from | | | | | |credit institutions| 2,926,634| | | 2,926,634| +-------------------+----------------+--------------+---------------+----------+ |Derivative | | | | | |contracts | | 181,599| | 181,599| +-------------------+----------------+--------------+---------------+----------+ |Receivables from | | | | | |customers | 8,574,074| | | 8,574,074| +-------------------+----------------+--------------+---------------+----------+ |Shares and | | | | | |participations | | | 40| 40| +-------------------+----------------+--------------+---------------+----------+ |Other receivables | 69,644| | | 69,644| +-------------------+----------------+--------------+---------------+----------+ |Other assets | 2,353| | | 2,353| +-------------------+----------------+--------------+---------------+----------+ |Total | 11,572,705| 181,599| 40|11,754,344| +-------------------+----------------+--------------+---------------+----------+ | | | | | | +-------------------+----------------+--------------+---------------+----------+ | | | Recognised at| | | | | | fair value| | | |Financial | |through profit| Other| | |liabilities | | or loss| liabilities| Total| +-------------------+----------------+--------------+---------------+----------+ |Liabilities to | | | | | |credit institutions| | | 1,058,000| 1,058,000| +-------------------+----------------+--------------+---------------+----------+ |Derivative | | | | | |contracts | | 17,299| | 17,299| +-------------------+----------------+--------------+---------------+----------+ |Debt securities | | | | | |issued to the | | | | | |public | | | 10,221,615|10,221,615| +-------------------+----------------+--------------+---------------+----------+ |Other liabilities | | | 89,293| 89,293| +-------------------+----------------+--------------+---------------+----------+ |Total | | 17,299| 11,368,908|11,386,207| +-------------------+----------------+--------------+---------------+----------+ |Valuation | | | | | |difference of debt | | | | | |securities issued | | | | | |to the public | | | | | |(difference between| | | | | |fair value and | | | | | |carrying amount) | | | | | |31 March 2017 | | | 237,788| 237,788| +-------------------+----------------+--------------+---------------+----------+ +------------------------------------------------------------------------------+ |Classification of financial assets liabilities 31 Dec 2016, TEUR | +-------------------+----------------+--------------+---------------+----------+ | | | Recognised at| | | | | | fair value| | | | |Loans and other|through profit| Available| | |Financial assets | receivables| or loss| for sale| Total| +-------------------+----------------+--------------+---------------+----------+ |Receivables from | | | | | |credit institutions| 2,304,556| | | 2,304,556| +-------------------+----------------+--------------+---------------+----------+ |Derivative | | | | | |contracts | | 220,461| | 220,461| +-------------------+----------------+--------------+---------------+----------+ |Receivables from | | | | | |customers | 9,039,563| | | 9,039,563| +-------------------+----------------+--------------+---------------+----------+ |Shares and | | | | | |participations | | | 40| 40| +-------------------+----------------+--------------+---------------+----------+ |Other receivables | 56,212| | | 56,212| +-------------------+----------------+--------------+---------------+----------+ |Other assets | 2,199| | | 2,199| +-------------------+----------------+--------------+---------------+----------+ |Total | 11,402,530| 220,461| 40|11,623,031| +-------------------+----------------+--------------+---------------+----------+ | | | | | | +-------------------+----------------+--------------+---------------+----------+ | | | Recognised at| | | | | | fair value| | | |Financial | |through profit| Other| | |liabilities | | or loss| liabilities| Total| +-------------------+----------------+--------------+---------------+----------+ |Liabilities to | | | | | |credit institutions| | | 1,888,000| 1,888,000| +-------------------+----------------+--------------+---------------+----------+ |Derivative | | | | | |contracts | | 6,233| | 6,233| +-------------------+----------------+--------------+---------------+----------+ |Debt securities | | | | | |issued to the | | | | | |public | | | 9,277,801| 9,277,801| +-------------------+----------------+--------------+---------------+----------+ |Other liabilities | | | 77,375| 77,375| +-------------------+----------------+--------------+---------------+----------+ |Total | | 6,233| 11,243,176|11,249,409| +-------------------+----------------+--------------+---------------+----------+ |Valuation | | | | | |difference of debt | | | | | |securities issued | | | | | |to the public | | | | | |(difference between| | | | | |fair value and | | | | | |carrying amount) | | | | | |31 Dec 2016 | | | 277,485| 277,485| +-------------------+----------------+--------------+---------------+----------+ Debt securities issued to the public are carried at amortised cost. The fair value of these debt instruments has been measured using information available in markets and employing commonly used valuation techniques. The difference between the fair value and carrying amount is presented as valuation difference in the "Classification of financial assets and liabilities" note. +-------------------------------------+----------------------------------------+ |Derivative contracts 31 Mar 2017, |Nominal values/residual term to maturity| |TEUR | | +-------------------------------------+---------+---------+---------+----------+ | |Less than| 1-5|More than| | | | 1 year| years| 5 years| Total| +-------------------------------------+---------+---------+---------+----------+ |Interest rate derivatives | | | | | +-------------------------------------+---------+---------+---------+----------+ |Hedging |2,756,837|8,216,977|7,124,058|18,097,871| +-------------------------------------+---------+---------+---------+----------+ |Total |2,756,837|8,216,977|7,124,058|18,097,871| +-------------------------------------+---------+---------+---------+----------+ +-------------------------+-------------------+-----------------+ | | Fair values | | +-------------------------+-------+-----------+ | | | Assets|Liabilities|Credit equivalent| +-------------------------+-------+-----------+-----------------+ |Interest rate derivatives| | | | +-------------------------+-------+-----------+-----------------+ |Hedging |181,599| 17,299| 394,236| +-------------------------+-------+-----------+-----------------+ |Total |181,599| 17,299| 394,236| +-------------------------+-------+-----------+-----------------+ +-------------------------------------+----------------------------------------+ |Derivative contracts 31 Dec 2016, |Nominal values/residual term to maturity| |TEUR | | +-------------------------------------+---------+---------+---------+----------+ | |Less than| 1-5|More than| | | | 1 year| years| 5 years| Total| +-------------------------------------+---------+---------+---------+----------+ |Interest rate derivatives | | | | | +-------------------------------------+---------+---------+---------+----------+ |Hedging |2,759,875|8,216,977|6,838,247|17,815,099| +-------------------------------------+---------+---------+---------+----------+ |Total |2,759,875|8,216,977|6,838,247|17,815,099| +-------------------------------------+---------+---------+---------+----------+ +-------------------------+-------------------+-----------------+ | | Fair values | | +-------------------------+-------+-----------+ | | | Assets|Liabilities|Credit equivalent| +-------------------------+-------+-----------+-----------------+ |Interest rate derivatives| | | | +-------------------------+-------+-----------+-----------------+ |Hedging |220,461| 6,233| 414,976| +-------------------------+-------+-----------+-----------------+ |Total |220,461| 6,233| 414,976| +-------------------------+-------+-----------+-----------------+ +------------------------------------------------------------------------------+ |Financial instruments classification, grouped by valuation technique, TEUR | +------------------------------------------------------------------------------+ | | +---------------------------------------+--------------------------------------+ |31 Mar 2017 | Fair value measurement at year end | +---------------------------------------+-------------------+----------+-------+ | |Balance sheet value| Level 1|Level 2| +---------------------------------------+-------------------+----------+-------+ |Recurring fair value measurements of | | | | |assets | | | | +---------------------------------------+-------------------+----------+-------+ |Derivate contracts | 181,599| |181,599| +---------------------------------------+-------------------+----------+-------+ |Total | 181,599| |181,599| +---------------------------------------+-------------------+----------+-------+ |Recurring fair value measurements of | | | | |liabilities | | | | +---------------------------------------+-------------------+----------+-------+ |Derivate contracts | 17,299| | 17,299| +---------------------------------------+-------------------+----------+-------+ |Total | 17,299| | 17,299| +---------------------------------------+-------------------+----------+-------+ |Financial liabilities not measured at | | | | |fair value | | | | +---------------------------------------+-------------------+----------+-------+ |Debt securities issued to the public | 10,221,615|10,095,600|363,804| +---------------------------------------+-------------------+----------+-------+ |Total | 10,221,615|10,095,600|363,804| +---------------------------------------+-------------------+----------+-------+ +----------------------------------------+-------------------------------------+ |31 Dec 2016 | Fair value measurement at year end | +----------------------------------------+-------------------+---------+-------+ | |Balance sheet value| Level 1|Level 2| +----------------------------------------+-------------------+---------+-------+ |Recurring fair value measurements of | | | | |assets | | | | +----------------------------------------+-------------------+---------+-------+ |Derivate contracts | 220,461| |220,461| +----------------------------------------+-------------------+---------+-------+ |Total | 220,461| |220,461| +----------------------------------------+-------------------+---------+-------+ |Recurring fair value measurements of | | | | |liabilities | | | | +----------------------------------------+-------------------+---------+-------+ |Derivate contracts | 6,233| | 6,233| +----------------------------------------+-------------------+---------+-------+ |Total | 6,233| | 6,233| +----------------------------------------+-------------------+---------+-------+ |Financial liabilities not measured at | | | | |fair value | | | | +----------------------------------------+-------------------+---------+-------+ |Debt securities issued to the public | 9,277,801|9,189,185|366,101| +----------------------------------------+-------------------+---------+-------+ |Total | 9,277,801|9,189,185|366,101| +----------------------------------------+-------------------+---------+-------+ Financial reporting 2017 Schedule for Interim Reports in 2017: Interim Report H1/2017 2 August 2017 Interim Report Q1-3/2017 1 November 2017 Helsinki, 27 April 2017 OP Mortgage Bank Board of Directors For more information, please contact Managing Director Lauri Iloniemi, tel. +358 (0)10 252 3541 DISTRIBUTION LSE London Stock Exchange OAM, Officially Appointed Mechanism Major media op.fi []
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