2007-11-08 07:00:23 CET
2007-11-08 07:00:23 CET
REGULATED INFORMATION
OKO Pankki Oyj - Quarterly report
OKO BANK PLC INTERIM REPORT 1 JULY-30 SEPTEMBER 2007 WITH PRESIDENT AND CEO'S COMMENTS
President and CEO's comments:
OKO Group's business performance developed favourably during the third quarter
despite troubled financial markets. Both Banking and Investment Services and
Non-life Insurance showed strong growth in their business operations and the
customer business improved its financial performance over the same period a year
ago. Corporate Banking, Markets and Non-life Insurance showed particularly
favourable developments in their earnings.
Group Treasury's financial performance was eroded by widening credit spreads due
to uncertainty in financial markets, resulting in a EUR 25 million decrease in
value, recognised as loss, of the Group's liquidity reserves worth EUR 5.5
billion. Liquid investments are not expected to lead to realised credit losses,
and the Group's risk exposure remained favourable.
Following the end of the third quarter, the Extraordinary General Meeting of 9
October 2007 made a historic decision to change OKO Bank plc's business name to
Pohjola Bank plc. This change of the business name and brand marks the
culmination of OKO's and Pohjola's integration, and I am confident that the
change will make the Group stronger from the perspective of Group personnel and
customers.
The Group's full-year profit prospects have remained unchanged, and I am
confident that we will be able to achieve a profit improvement of at least 10%
in line with our previous expectations.
Helsinki, 8 November 2007
Mikael Silvennoinen
OKO BANK PLC INTERIM REPORT 1 JULY-30 SEPTEMBER 2007
July-September 2007
- Earnings before tax amounted to EUR 56 million (40). 1)
- Earnings per share stood at EUR 0.20 (0.22), while equity per share was EUR
9.07 (8.91). 1)
- Markets showed a good trading performance.
- Non-life Insurance return on investment at fair value stood at 1.1% (2.5).
- With no direct investments in sub-prime loans, the Group has direct sub-prime
investments of only EUR 3 million.
- Strongly widening credit spreads in international financial markets reduced
the market value of the Group Treasury's liquidity reserves by EUR 28 million,
of which EUR 25 million were recognised in the income statement and EUR 3
million in the fair value reserve.
- Return on equity calculated at fair value was 7.1% (18.3).
- The Group's like-for-like net income increased by 19% and like-for-like
expenses by 9%.
- Insurance premium revenue rose by 10% year on year. The net number of
Pohjola's loyal customers grew by more than 7,000.
- Banking and Investment Services' loan and guarantee portfolio increased by 2%
in the third quarter and by 14% during the last 12 months.
- Non-life Insurance reported a combined ratio of 92.4% (99.9). The combined
ratio excluding amortisation on intangible assets arising from the corporate
acquisition stood at 89.5% (96.7).
- OKO Bank plc's Extraordinary General Meeting on 9 October 2007 decided to
rename the company's business name Pohjola Bank plc.
January-September 2007
- Earnings before tax amounted to EUR 220 million (166). 1)
- Earnings per share stood at EUR 0.80 (0.69), while return on equity was 10.8%
(9.1).
- The Group's like-for-like net income increased by 18% and like-for-like
expenses by 6%.
- Insurance premium revenue rose by 10% year on year. The net number of
Pohjola's loyal customers grew by 24,300.
- Non-life Insurance reported a combined ratio of 96.0% (98.8) and operating
combined ratio of 93.0% (95.4).
This Interim Report is based on unaudited figures.
1) 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 30 June 2007 are used as
comparatives.
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| Key indicators | Q3/ | Q3/ | Q1-3/ | Q1-3/ | |
| | 2007 | 2006 | 2 | 2 | 2006 |
| | | | 007 | 006 | |
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| Earnings before tax, EUR | 56 | 40 | 220 | 166 | 223 |
| million | | | | | |
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| Profit for the period, EUR | 40 | 44 | 163 | 139 | 180 |
| million | | | | | |
--------------------------------------------------------------------------------
| Return on equity, % | 7.1 | 18.3 | 10.8 | 9.1 | 9.5 |
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| | | | | | |
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| Balance sheet total, EUR | | | 25.8 | 25.3 | 24.2 |
| billion | | | | | |
--------------------------------------------------------------------------------
| Risk-weighted items, EUR | | | 12.8 | 11.9 | 11.6 |
| billion | | | | | |
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| Loan portfolio, EUR billion | | | 9.0 | 7.7 | 7.9 |
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| Assets under management, | | | 32.5 | 29.7 | 31.3 |
| EUR billion | | | | | |
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| | | | | | |
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| Capital adequacy, % | | | 13.0 | 12.7 | 12.9 |
--------------------------------------------------------------------------------
| Tier 1 ratio, % | | | 7.9 | 8.2 | 8.2 |
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| Proportion of doubtful | | | 0.2 | 0.2 | 0.2 |
| receivables, % | | | | | |
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| | | | | | |
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| | | | | | |
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| Earnings per share, EUR | 0.20 | 0.22 | 0.80 | 0.69 | 0.89 |
--------------------------------------------------------------------------------
| Earnings per share, incl. | 0.16 | 0.39 | 0.73 | 0.63 | 0.89 |
| change in fair value, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.20 | 0.22 | 0.80 | 0.69 | 0.89 |
| diluted. EUR | | | | | |
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| Equity per share, EUR | | | 9.07 | 8.75 | 8.99 |
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| Market capitalisation (A+K | | | 2,950 | 2,547 | 2,583 |
| shares), EUR million | | | | | |
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| | | | | | |
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| Average personnel | 3,021 | 3,098 | 2,987 | 3,107 | 3,030 |
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Earnings performance by quarter
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| | 2006 | 2007 |
--------------------------------------------------------------------------------
| EUR million | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
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| | | | | | | | |
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| Net interest income | 26 | 25 | 22 | 23 | 26 | 32 | 27 |
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| Impairment losses on | -1 | 0 | 2 | 0 | 0 | 1 | 1 |
| receivables | | | | | | | |
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| Net interest income | 27 | 25 | 20 | 23 | 26 | 31 | 26 |
| after impairment | | | | | | | |
| losses | | | | | | | |
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| Net income from | 86 | 90 | 68 | 84 | 94 | 113 | 103 |
| Non-life Insurance | | | | | | | |
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| Net commissions and | 26 | 23 | 25 | 29 | 28 | 31 | 24 |
| fees | | | | | | | |
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| Net trading income | 3 | 2 | 6 | 9 | 7 | 3 | -16 |
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| Net investment income | 20 | 9 | 2 | 7 | 10 | 13 | 5 |
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| Other operating income | 12 | 13 | 11 | 13 | 13 | 24 | 15 |
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| Total net income | 173 | 163 | 131 | 165 | 179 | 214 | 156 |
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| Personnel costs | 42 | 45 | 36 | 42 | 41 | 45 | 37 |
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| IT expenses | 11 | 11 | 10 | 10 | 11 | 11 | 10 |
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| Depreciation and | 15 | 14 | 14 | 15 | 15 | 16 | 15 |
| amortisation | | | | | | | |
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| Other expenses | 37 | 35 | 32 | 41 | 47 | 43 | 38 |
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| Total expenses | 104 | 105 | 92 | 108 | 114 | 114 | 100 |
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| Share of associates' | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| profits/losses | | | | | | | |
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| Earnings before tax | 69 | 57 | 40 | 57 | 65 | 100 | 56 |
| Change in fair value | -20 | -45 | 48 | 16 | 15 | -24 | -9 |
| reserve | 49 | 12 | 88 | 73 | 80 | 76 | 46 |
| Earnings before tax at | | | | | | | |
| fair value | | | | | | | |
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| Income tax expense | 16 | 15 | -4 | 15 | 15 | 27 | 16 |
| Profit for the period | 53 | 42 | 44 | 41 | 50 | 73 | 40 |
| Tax on change in fair | -5 | -12 | 12 | 4 | 4 | -6 | -2 |
| value reserve | | | | | | | |
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| Earnings for the | 38 | 9 | 80 | 53 | 61 | 54 | 33 |
| period at fair value | | | | | | | |
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| | | | | | | | |
--------------------------------------------------------------------------------
| Return on equity, % | 8.5 | 2.1 | 18.3 | 11.7 | 13.7 | 12.2 | 7.1 |
--------------------------------------------------------------------------------
| Tier 1 ratio, | 8.8 | 8.2 | 8.2 | 8.2 | 8.0 | 8.0 | 7.9 |
| Capital adequacy | | | | | | | |
| ratio, % | | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED EARNINGS
July-September
OKO Bank Group's (OKO) earnings before tax rose by 41% to EUR 56 million (40).
Consolidated net income increased by 19% to EUR 156 million (131) while expenses
rose by 9% to EUR 100 million (92).
Period-end capital adequacy ratio stood at 13.0% (13.3) and Tier 1 ratio at 7.9%
(8.0).
Earnings per share were EUR 0.20 (0.22), while equity per share was EUR 9.07
(8.91).
Earnings before tax at fair value amounted to EUR 46 million (88) and annualised
return on equity stood at 7.1% (18.3).
January-September
Earnings before tax came to EUR 220 million (166), which was affected by the
liquidated damages of EUR 10 million related to the cancellation of partnership
between Pohjola Group plc and savings banks. Consolidated net income increased
by 18% to EUR 549 million (467) and expenses by 9% to EUR 328 million (301).
Earnings per share were EUR 0.80 (0.69).
Annualised return on equity stood at 10.8% (9.1).
EARNINGS BY BUSINESS LINE
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| Earnings before tax, EUR | Q3/2007 | Q1-3/2006 | Q3/2007 | Q1-3/2006 |
| million | | | | |
--------------------------------------------------------------------------------
| Banking and Investment | 23 | 35 | 120 | 120 |
| Services | | | | |
--------------------------------------------------------------------------------
| Non-life Insurance | 42 | 11 | 125 | 58 |
--------------------------------------------------------------------------------
| Other Operations | -9 | -7 | -24 | -12 |
--------------------------------------------------------------------------------
| Group total | 56 | 40 | 220 | 166 |
--------------------------------------------------------------------------------
July-September
Banking and Investment Services recorded earnings of 23 EUR million before tax
(35). Uncertainties caused by the troubled US home loan market widened credit
spreads, affecting in particular Group Treasury, which showed a pre-tax loss of
EUR 19 million (2). Other businesses recorded earnings in line with or above
expectations. The loan portfolio of Corporate Banking grew by 3%, standing at
EUR 8.9 billion on 30 September. The risk exposure remained good. The average
level of margins remained stable, standing at 0.80% at the end of the period.
Non-life Insurance posted earnings of EUR 42 million before tax (11). Insurance
premium revenue improved by 10% to EUR 217 million (196). The third-quarter
balance on technical account was better than a year ago. Investment income
recognised in the income statement totalled EUR 38 million (23) and, despite
uncertain financial markets, that in fair value came to EUR 32 (69).
Other Operations made a pre-tax loss of EUR 9 million (loss of EUR 7 million).
January-September
Banking and Investment Services recorded earnings of EUR 120 million before tax
(120). This figure included EUR 11 million in capital gains on OMX shares (12).
The loan portfolio of Corporate Banking grew by 13% from the end of 2006 and by
16% from the end of September 2006.
Non-life Insurance posted earnings of EUR 125 million before tax (58). This
figure included EUR 6 million in capital gains on the sale of the marine hull
insurance portfolio. Insurance premium revenue increased by 10% to EUR 639
million (584). Investment income recognised in the income statement rose to EUR
126 million (87) and that at fair value totalled EUR 119 million (91).
Other Operations made a pre-tax loss of EUR 24 million (loss of 12), including
liquidated damages of EUR 10 million recognised as integration expenses related
to the cancellation of the partnership agreement with savings banks, and EUR 1
million recognised as interest expenses related to the redemption of Pohjola
shares held by minority shareholders. Results for the same period a year ago
included EUR 2 million in capital gains on the sale of Eurocard shares.
OPERATING ENVIRONMENT
The US home loan crisis that broke out in late summer has added uncertainty to
the global economy. There are fears that indebted US households may reduce their
spending, which would slow down economic growth in the country. However, the
euro zone is expected to continue its economic growth somewhat at the previous
year's rate, while Russia and Asia are still showing rapid growth rates.
The home loan crisis has been reflected in a lending squeeze in international
financial markets, wider margins and relatively large falls in earnings reported
by some financial institutions. Central banks have increased money-market
liquidity in an effort to reduce the risk of drifting into a loan slump, and the
Federal Reserve has cut its benchmark interest rate.
Finland has continued to enjoy an economic upward trend, with business
conditions in manufacturing, construction and services companies showing
extraordinary buoyancy. Business confidence is expected to remain high
throughout the rest of the year and consumer confidence is still strong.
Improved employment figures and higher income have supported household spending.
Higher interest rates have reduced demand for loans only slightly, because an
increase in customer wealth has compensated for higher rates of interest on
loans. It is projected that growth in the home mortgage portfolio will continue
to slow down somewhat while home price increases will flatten out.
Mounting uncertainty in the equity market was reflected in a marked fall in
share prices at the end of the summer. However, prices began to rebound during
the autumn although they occasionally underwent drastic swings. This mounting
uncertainty has also affected mutual funds, with bond funds in particular seeing
a number of redemptions.
Premiums written in the non-life insurance sector during January-September grew
at the same rate as a year ago.
INTEGRATION
The integration process of OKO Bank's and Pohjola's business operations is
proceeding according to plan. The results so far support earlier estimates of
income and cost synergies, the annual amount of which should reach a good EUR 50
million before tax by 2010.
Decisions made until the present date result in annual savings of approximately
EUR 30 million, of which decisions worth EUR 1 million were taken in the third
quarter. New cost savings are related to ICT functions with Non-life Insurance.
Of the annual cost savings, EUR 13 million were gained in 2006, the 2007
estimate is EUR 27 million and that for 2008 onwards a total of EUR 30 million.
The number of loyal customer households within Non-life Insurance increased by
more than 7,000 during the reporting period, over 90% of which was thanks to
cooperation within OP-Pohjola Group. On 30 September, the number of loyal
customers totalled almost 392,000 against the target figure of 500,000 by the
end of 2010. The average annual premiums written per loyal-customer household
come to over EUR 600.
Integration expenses for September 2005-September 2007, related to the Pohjola
acquisition, totalled EUR 22 million.
OKO Bank's Extraordinary General Meeting of 9 October 2007 decided to rename OKO
Bank plc's business name Pohjola Bank plc. The altered Articles of Association
will be registered in the Trade Register and the new business name should be
officially adopted on 1 March 2008. Similarly, Group companies' names will begin
with Pohjola. The name change will bring all Group operations under a single
name and brand. On 12 September 2007, OP Bank Group was renamed OP-Pohjola
Group.
GROUP RESTRUCTURING
On 2 May 2007, the Arbitral Tribunal appointed by the Central Chamber of
Commerce decided to set the redemption price of Pohjola Group plc shares at EUR
14.35 per share. By the end of 2007, OKO agreed with some 1,200 Pohjola Group
plc's (Pohjola) former minority shareholders that the redemption price of EUR
14.35, based on the arbitral award, would remain final. These shareholders
represent around 11.8 million shares, accounting for roughly 77.5% of all of the
disputed Pohjola shares held by minority shareholders. In other respects, the
case of the redemption price of Pohjola shares is still pending at the Helsinki
District Court, the dispute over setting the redemption price involving about
3.5 million Pohjola shares.
PERSONNEL
On 30 September, the Group had a staff of 3,046, up by 51 from 30 June, 743
(736) of whom worked for Banking and Investment Services, 2,248 (2,205) for
Non-life Insurance and 55 (54) for Other Operations.
CAPITAL EXPENDITURE
Third-quarter gross capital expenditure totalled EUR 3 million, EUR 1 million
allocated to Banking and Investment Services and EUR 2 million to Non-life
Insurance. These investments were made in IT systems aimed at developing network
services and streamlining internal processes.
CAPITAL ADEQUACY
The capital adequacy ratio under the Credit Institutions Act stood at 13.0%
(13.3) as against the statutory minimum requirement of 8%. Tier 1 ratio to total
risk-weighted items was 7.9% (8.0). The risk-weighted items increased from EUR
12,465 million to EUR 12,809 million, up by 3%, due mainly to growth in the loan
portfolio and binding standby credit facilities.
Own funds, which include earnings for the period, remained unchanged at EUR
1,663 million. Tier 1 own funds came to EUR 1,010 million (999), hybrid capital
accounting for EUR 224 million, or 22.1% (22.4). The minimum own funds
requirement to cover market risk amounted to EUR 112 million (103).
A new Capital Adequacy Directive entered into force in the EU in early 2007.
Ratified on 9 February 2007, the amended Credit Institutions Act came into force
on 15 February 2007. OKO Bank is making use of the new calculation methods
enabled by the transitional provisions related to the new capital adequacy
regime. Consequently, OKO Bank will calculate its capital adequacy for 2007
based on the existing requirements, i.e. the same way as in 2006. In the
calculation of capital adequacy requirements for credit risk, OKO Bank aims to
phase in the internal ratings-based approach (IRBA), with the capital adequacy
requirement for the first exposure classes, such as corporate exposure,
calculated using IRBA in 2008. The capital adequacy requirement for operational
risks will be calculated using the Basic Indicator Approach (BIA) from 2008
onwards.
RISK EXPOSURE
Banking and investment services
Sparked by the turmoil hitting the US sub-prime home loan market in the third
quarter, uncertainty in financial markets widened credit spreads and increased
financial-market volatility. For Banking and Investment Services, the swiftly
widening credit spreads resulted in a decrease in value of EUR 28 million
through the market price valuation of liquidity reserves, EUR 25 million
recognised in the income statement and EUR 3 million in fair value reserve.
Liquidity reserves amounted to EUR 5.5 billion (5.3), invested primarily in
notes and bonds issued by governments, municipalities, financial institutions
and companies all showing good credit ratings, and in securitised receivables.
Non-rated receivables include notes and bonds issued by Finnish companies. The
average remaining maturity of liquidity reserves was 2.9 years.
Liquidity reserves by maturity and credit rating on 30 September 2007 (EUR
million)
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| Year(s) | 0-1 | 1-3 | 3-5 | 5-7 | 7-10 | 10- | Total | % |
--------------------------------------------------------------------------------
| AAA | 1,24 | 214 | 317 | 422 | 348 | 120 | 2,668 | 48 |
| | 7 | | | | | | | |
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| AA | 849 | 205 | 319 | 232 | 18 | 0 | 1,623 | 29 |
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| A | 0 | 184 | 163 | 38 | 58 | 0 | 443 | 8 |
--------------------------------------------------------------------------------
| BBB | 38 | 25 | 74 | 25 | 2 | 0 | 163 | 3 |
--------------------------------------------------------------------------------
| BB+ or lower | 0 | 1 | 0 | 0 | 0 | 0 | 1 | 0 |
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| Not Rated | 257 | 114 | 205 | 37 | 31 | 0 | 644 | 12 |
--------------------------------------------------------------------------------
| | 2,39 | 743 | 1,077 | 754 | 457 | 120 | 5,542 | 100 |
| | 1 | | | | | | | |
--------------------------------------------------------------------------------
Liquidity reserves do not contain any direct investments in US sub-prime home
loans, and indirect investments through AAA-rated, securitised instruments
amount only to roughly EUR 3 million. On the basis of good credit ratings within
liquidity reserve, the decrease in value caused by the wider credit spreads
should not be reflected in realised credit losses.
The greater uncertainty in financial markets has not had any effect on the
availability of OKO Bank's short-term or long-term funding, and the Bank's
liquidity position has remained strong. However, the wider credit spreads have
increased funding costs throughout the banking sector. Nevertheless, OKO Bank's
strong credit rating and good liquidity position have restrained funding-cost
hikes.
Despite the greater uncertainty in financial markets, Banking and Investment
Services' risk exposure continued to remain good. During the reporting period,
total exposure increased by EUR 1.0 billion to EUR 27.8 billion, thanks mainly
to growth in the corporate loan portfolio and unused credit facilities and notes
and bonds included in the liquidity reserve. Total exposure grew by EUR 1.4
billion from the beginning of 2007.
The ratio of investment-grade exposure - i.e. ratings 1-4, excluding private
customers - to total exposure remained stable, standing at 75.0% (73.3), the
share of ratings 11-12 was 0.2% (0.2) and that of non-rated exposure 2% (3). Of
corporate exposure, the share of investment-grade corporate exposure rose to 55%
(52). The corporate exposure of the two lowest rating classes came to EUR 59
million (58), accounting for 0.5% of total corporate exposure.
Significant customer exposure rose to EUR 4.0 billion (3.1). The ratio of
doubtful receivables to the loan and guarantee portfolio continued to remain
very low, at 0.2%, or EUR 20 million. Loan and guarantee losses and impairment
losses pulled down earnings by EUR 1.2 million in the third quarter and by EUR
1.7 during Q1-3. OKO Bank kept market risks at a moderate level. Materialised
operational risks reduced earnings for Q1-3 by EUR 0.8 million.
Non-life Insurance
On 30 September, Non-life Insurance solvency capital came to EUR 694 million
(666) and the ratio of solvency capital to insurance premium revenue (solvency
ratio) stood at 82% (81).
In Non-life Insurance, the third quarter saw 57 (50) major or medium-sized
losses (in excess of EUR 0.1 million), with their claims incurred retained for
own account totalling EUR 25 million (29), while their Q1-3 number came to 163
(135) and their claims incurred retained for own account totalled EUR 59 million
(60).
Of the investment portfolio, bonds and bond funds accounted for 64% (67) and
equities for 18% (17). The fixed-income portfolio by credit rating remained
healthy, considering that 80% of the fixed-income instruments were rated at
least A-. Non-life Insurance has neither direct nor indirect investments related
to sub-prime home loans.
Non-life Insurance fixed-income portfolio by maturity and credit rating on 30
September 2007 (EUR million)
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| Year(s) | 0-1 | 1-3 | 3-5 | 5-7 | 7-10 | 10- | Total | % |
--------------------------------------------------------------------------------
| AAA | 61 | 159 | 137 | 34 | 76 | 112 | 580 | 31 |
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| AA | 166 | 42 | 43 | 8 | 30 | 16 | 305 | 16 |
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| A | 9 | 73 | 311 | 116 | 29 | 57 | 594 | 32 |
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| BBB | 6 | 32 | 88 | 27 | 29 | 0 | 181 | 10 |
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| BB+ or lower | 14 | 16 | 24 | 12 | 31 | 2 | 97 | 5 |
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| Not Rated | 17 | 15 | 61 | 0 | 0 | 0 | 94 | 5 |
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| | 272 | 336 | 664 | 197 | 194 | 186 | 1,850 | 100 |
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The average remaining maturity of the fixed-income portfolio was 5.5 years and
the duration 3.6 years (3.6). Despite the uncertainty in financial markets,
return on investment at fair value stood at 1.1% in July-September (2.5) and
4.6% in January-September (3.6).
CREDIT RATINGS
OKO Bank's credit ratings are as follows:
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| Rating agency | Short-term debt | Long-term debt |
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| Standard & Poor's | A-1+ | AA- |
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| Moody's | P-1 | Aa1 |
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| Fitch | F1+ | AA- |
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All of the credit rating agencies have confirmed a stable rating outlook for OKO
Bank.
SHARE CAPITAL AND SHAREHOLDERS
On 30 September, the number of OKO Bank Series A shares quoted on the OMX Nordic
Exchange Helsinki totalled 159.6 million, accounting for 78.5% of all OKO Bank
shares and 43.8% of votes. The number of Series K shares totalled around 43.8
million.
Series A share closed at EUR 14.50 against EUR 12.58 a year earlier. In
July-September, the share price reached a high of EUR 15.00 and a low of EUR
12.08 while roughly 36.8 million shares changed hands, compared with 15.8
million a year ago.
OKO Bank had some 30,550 shareholders on 30 September, decreasing by 468 during
the third quarter. Around 95% of the shareholders were private individuals. The
holdings of major shareholders did not undergo any significant changes. The
largest shareholder was OP Bank Group Central Cooperative, representing 29.9% of
OKO Bank shares and 56.9% of votes. The number of nominee registered shares in
proportion to all Series A shares fell from 19.7% to 17.3% during the third
quarter.
EVENTS AFTER THE REPORTING PERIOD
As proposed by the Board of Directors, OKO Bank plc's Extraordinary General
Meeting on 9 October 2007 decided to change the Company's business name and
alter Articles 1 and 2 of the Articles of Association. Accordingly, the
Company's new business name is Pohjola Pankki Oyj in Finnish, Pohjola Bank Abp
in Swedish and Pohjola Bank plc in English. This alteration of the Articles of
Association will be registered in the Trade Register and the new business name
should be adopted officially on 1 March 2008.
On 22 October 2007, OKO Asset Management Limited was renamed Pohjola Asset
Management Limited.
OUTLOOK TOWARDS THE YEAR END
The corporate loan market is expected to continue its growth, albeit at a slower
rate than during Q1-3, and lending margins are anticipated to remain stable.
Provided that the operating environment remains in line with expectations, 2007
earnings before tax generated by Banking and Investment Services are anticipated
to be better than in 2006. Risk exposure is projected to remain healthy.
In addition to market growth, intense cooperation with OP-Pohjola Group member
cooperative banks, which is expected to strengthen the market share among
household customers in particular, will boost insurance premium revenue within
Non-life Insurance.
In Non-life Insurance, the combined ratio - excluding changes in reserving bases
and amortisation on intangible assets arising from the acquisition - is
estimated to be less than 94.0% if the trend in major losses appears similar to
that in January-September.
Results posted by Other Operations, excluding the liquidated damages of EUR 10
million ruled by the Arbitral Tribunal, are expected to be on a par with those
in 2006.
On the basis of the January-September financial performance, the Group expects
to have every prospect of improving earnings before tax at fair value by at
least 10% in 2007, provided that no radical changes take place in equity and
bond markets during the rest of the year.
Should the above forward-looking statements and assumptions about the near-term
outlook come true, the main risks involved are associated with the general
operating environment and the development of interest rates and share prices.
Although developments in the general operating environment are beyond the Group
management's control, the management may influence the effects of interest-rate
changes and equity markets on investment and trading by investing assets
securely, diversifying risks, promoting its personnel's professional skills and
managing risks effectively. In addition, the management contributes to the
appropriate pricing of customer-specific risk and, consequently, the Group's
financial performance.
All forward-looking statements in this Interim Report expressing the
management's expectations, beliefs, estimates, forecasts, projections and
assumptions are based on the current view of the future financial performance of
OKO Bank plc and its various functions, and actual results may differ materially
from those expressed in the forward-looking statements.
BUSINESS OPERATIONS
The table below shows earnings before tax reported by the Group's business
lines, and the strategic targets and their actuals. Formulae for key ratios can
be found on pages
18-20.
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| | Q3/20 | Q3/200 | Q1-3/ | Q1-3/ | 2006 | Target |
| | 07 | 6 | 2007 | 2006 | | 2009 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Banking and Investment | | | | | | |
| Services | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax, | 23 | 35 | 120 | 120 | 163 | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | 7.7 | 16.1 | 14.2 | 16.2 | 18.2 | > 18 |
| equity (ROE), % | | | | | | |
--------------------------------------------------------------------------------
| Operating cost/income | 54.1 | 40.9 | 42.5 | 40.5 | 41.5 | 40.0 |
| ratio, % | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Non-life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax, | 42 | 11 | 125 | 58 | 78 | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | 23.7 | 44.1 | 27.7 | 18.8 | 20.9 | > 20 |
| equity (ROE), % | | | | | | |
--------------------------------------------------------------------------------
| Operating combined | 89.5 | 96.7 | 93.0 | 95.4 | 95.4 | < 94 |
| ratio, % | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other Operations | | | | | | |
--------------------------------------------------------------------------------
| Earning/loss before | -9 | -7 | -24 | -12 | -19 | |
| tax, EUR million | | | | | | |
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BANKING AND INVESTMENT SERVICES
Banking and Investment Services comprises the following divisions:
- Corporate Banking
- Markets
- Central Banking
- Group Treasury
- Asset Management
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| | | 2006 | | | | 2007 | |
--------------------------------------------------------------------------------
| | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
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| Income statement, | | | | | | | |
| EUR million | | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 30 | 28 | 27 | 29 | 29 | 34 | 32 |
--------------------------------------------------------------------------------
| Impairment losses | -1 | 0 | 2 | 0 | 0 | 1 | 1 |
| on receivables | | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 30 | 28 | 25 | 28 | 29 | 34 | 31 |
| after impairment | | | | | | | |
| losses | | | | | | | |
--------------------------------------------------------------------------------
| Net commissions and | 23 | 22 | 26 | 29 | 26 | 30 | 26 |
| fees | | | | | | | |
--------------------------------------------------------------------------------
| Net trading income | 3 | 2 | 6 | 9 | 7 | 2 | -16 |
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| Net investment | 14 | 8 | 2 | 6 | 5 | 13 | 5 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Other operating | 7 | 7 | 4 | 7 | 7 | 7 | 8 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Total net income | 76 | 67 | 62 | 79 | 74 | 86 | 53 |
--------------------------------------------------------------------------------
| Total expenses | 29 | 29 | 27 | 36 | 30 | 33 | 29 |
--------------------------------------------------------------------------------
| Amortisation on | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
| intangible assets | | | | | | | |
| related to company | | | | | | | |
| acquisition | | | | | | | |
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| Earnings before tax | 47 | 37 | 35 | 43 | 45 | 52 | 23 |
--------------------------------------------------------------------------------
| Change in fair | -4 | -7 | 2 | 2 | -2 | -8 | -3 |
| value reserve | | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 43 | 30 | 37 | 45 | 43 | 45 | 20 |
| at fair value | | | | | | | |
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| | | | | | | | |
--------------------------------------------------------------------------------
| Key ratios, % | | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | 18.9 | 14.0 | 16.1 | 19.2 | 17.6 | 17.7 | 7.7 |
| equity (ROE) p.a. | | | | | | | |
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| Operating | 37.9 | 43.1 | 40.9 | 44.0 | 39.1 | 38.2 | 54.1 |
| cost/income ratio | | | | | | | |
--------------------------------------------------------------------------------
| Proportion of | 0.3 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 |
| doubtful | | | | | | | |
| receivables to | | | | | | | |
| receivables from | | | | | | | |
| customers and | | | | | | | |
| guarantees, % | | | | | | | |
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| | | | | | | | |
--------------------------------------------------------------------------------
| | 31 | 30 | 30 | 31 Dec | 31 | 30 | 30 |
| | March | June | Sept | | March | June | Sept |
--------------------------------------------------------------------------------
| Volume data, EUR | | | | | | | |
| billion | | | | | | | |
--------------------------------------------------------------------------------
| Receivables from | 7.1 | 7.4 | 7.7 | 7.9 | 8.3 | 8.7 | 8.9 |
| customers | | | | | | | |
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| Unused standby | 2.7 | 3.1 | 3.1 | 3.6 | 3.4 | 3.1 | 3.5 |
| credit facilities | | | | | | | |
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| Guarantees | 1.5 | 1.8 | 1.9 | 1.9 | 1.8 | 2.0 | 2.0 |
--------------------------------------------------------------------------------
| Assets under | 28.9 | 28.5 | 29.7 | 31.3 | 31.3 | 32.5 | 32.5 |
| management | | | | | | | |
--------------------------------------------------------------------------------
| Notes and bonds | 4.9 | 4.1 | 5.2 | 4.9 | 5.5 | 3.7 | 4.6 |
--------------------------------------------------------------------------------
| Receivables from | 4.1 | 4.1 | 4.6 | 4.7 | 3.9 | 4.0 | 4.1 |
| OP-Pohjola Group | | | | | | | |
| member cooperative | | | | | | | |
| banks | | | | | | | |
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| Liabilities to | 1.4 | 1.4 | 1.4 | 1.3 | 1.3 | 1.4 | 1.7 |
| OP-Pohjola Group | | | | | | | |
| member cooperative | | | | | | | |
| banks | | | | | | | |
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| Risk-weighted | 9.9 | 10.7 | 11.1 | 11.1 | 11.8 | 12.0 | 12.5 |
| commitments | | | | | | | |
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| Debt securities | 11.7 | 12.2 | 12.9 | 13.9 | 15.1 | 13.5 | 13.8 |
| issued to the | | | | | | | |
| public | | | | | | | |
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| | | | | | | | |
--------------------------------------------------------------------------------
| Average personnel | 730 | 737 | 747 | 718 | 734 | 736 | 743 |
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| | | | | | | | |
--------------------------------------------------------------------------------
| Average margins, % | | | | | | | |
--------------------------------------------------------------------------------
| Margin on corporate | 0.88 | 0.79 | 0.89 | 0.87 | 0.81 | 0.79 | 0.80 |
| loan portfolio | | | | | | | |
--------------------------------------------------------------------------------
| Margin on | 0.27 | 0.26 | 0.25 | 0.24 | 0.24 | 0.24 | 0.23 |
| institutional loan | | | | | | | |
| portfolio | | | | | | | |
--------------------------------------------------------------------------------
| Margin on | 0.15 | 0.15 | 0.14 | 0.12 | 0.12 | 0.12 | 0.12 |
| OP-Pohjola Group | | | | | | | |
| member cooperative | | | | | | | |
| banks' loan | | | | | | | |
| portfolio | | | | | | | |
--------------------------------------------------------------------------------
| Margin on | 0.21 | 0.13 | 0.13 | 0.11 | 0.11 | 0.13 | 0.12 |
| OP-Pohjola Group | | | | | | | |
| member cooperative | | | | | | | |
| banks' deposits | | | | | | | |
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July-September
Earnings
Banking and Investment Services reported earnings of EUR 23 million before tax
(35).
Net interest income before impairment losses on receivables came to EUR 32
million (27). Impairment losses on receivables reduced earnings by a net amount
of EUR 1.2 million (1.6).
Net commission income was EUR 26 million (26).
Wider credit spreads dented earnings by EUR 25 million through the market price
valuation of liquidity reserves, with the result that Banking and Investment
Services showed a trading loss of EUR 16 million (6).
Net investment income amounted to EUR 5 million (2).
Operating return on equity stood at 7.7% (16.1) and the cost/income ratio at
54.1% (40.9).
Corporate Banking
The total amount of loans and guarantees within Corporate Banking increased by
2% to EUR 10.8 billion in the third quarter and by 14% in the year to September.
The Corporate Banking loan portfolio grew by 3% to EUR 8.9 billion. Demand for
loans remained at a normal level in view of the season and the loan portfolio
grew by 16% to EUR 1.3 billion in the year to September. At the end of August,
OKO Bank's market share of corporate loans rose to 18.2%, up by 1.0 percentage
point from the year-end.
Net interest income increased by 23% to EUR 26 million (21).
The margin level in the corporate loan portfolio remained stable, standing at
0.80% on 30 September. The margins of institutional loans remained unchanged in
the third quarter.
Despite long-lasting and brisk growth in the loan portfolio, the risk exposure
is still considered to be good. Net impairment losses on receivables totalled
EUR 1.2 million (1.6).
Corporate Banking recorded earnings of EUR 24 million (20) before tax.
Markets
Earnings before tax improved to EUR 9 million (5), which is mainly explained by
growth in net commission income, derivatives trading income and customer trading
margins.
Central Banking
Year on year, Central Banking posted higher earnings before tax, totalling EUR 5
million (4).
Group Treasury
Group Treasury showed a loss of EUR 19 million before tax (2). Its earnings
performance was eroded by the uncertainty in financial markets since July and
the resulting wider credit spreads, with its negative effect of EUR 25 million
on the market price valuation of liquidity reserves and the fixed-income
instrument portfolio. Net investment income totalled EUR 5 million (2).
Asset Management
In Asset Management, assets under management on 30 September totalled EUR 32.5
billion (32.5), institutional customers accounting for EUR 16.7 billion (16.6),
OP mutual funds for EUR 14 billion (14.2) and OKO Private for EUR 1.0 billion
(1.0).
Asset Management improved its earnings to EUR 5 million (4) as a result of
increased management fees and materialised cost synergies.
January-September
Banking and Investment Services reported earnings of EUR 120 million before tax
(120).
Net interest income before impairment losses on receivables came to EUR 96
million (85). Impairment losses on receivables reduced earnings by a net amount
of EUR 1.7 million (0.8). The Corporate Banking loan portfolio grew by 13% to
EUR 8.9 billion.
Net commission income grew to EUR 80 million (70), evenly distributed between
Corporate Banking, Markets and Asset Management.
Net trading loss came to EUR 7 million (10).
Net investment income totalled EUR 23 million (23), the figure including capital
gains of EUR 11 million recognised on the sale of OMX shares (12).
Operating return on equity stood at 14.2% (16.2) and the cost/income ratio at
42.5% (40.5).
NON-LIFE INSURANCE
Non-life Insurance consists of the following divisions:
- Corporate Customers
- Private Customers
- Baltic States
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| | | | | | | | |
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| | | 2006 | | | | 2007 | |
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| | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
--------------------------------------------------------------------------------
| Income statement, | | | | | | | |
| EUR million | | | | | | | |
--------------------------------------------------------------------------------
| Insurance premium | 187 | 200 | 196 | 204 | 204 | 219 | 217 |
| revenue | | | | | | | |
--------------------------------------------------------------------------------
| Claims incurred | 129 | 129 | 141 | 137 | 147 | 136 | 141 |
--------------------------------------------------------------------------------
| Loss adjustment | 10 | 11 | 10 | 12 | 12 | 12 | 11 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Operating expenses | 45 | 43 | 39 | 45 | 47 | 48 | 42 |
--------------------------------------------------------------------------------
| Amortisation/adjust | 7 | 6 | 6 | 6 | 6 | 7 | 6 |
| ment of intangible | | | | | | | |
| assets related to | | | | | | | |
| company acquisition | | | | | | | |
--------------------------------------------------------------------------------
| Balance on | -4 | 11 | 0 | 3 | -8 | 17 | 16 |
| technical account | | | | | | | |
--------------------------------------------------------------------------------
| Net investment | 36 | 28 | 23 | 28 | 48 | 41 | 38 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Other income and | 1 | -4 | 1 | 0 | 3 | 7 | -1 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 33 | 35 | 24 | 32 | 42 | 64 | 54 |
--------------------------------------------------------------------------------
| Unwinding of | 9 | 9 | 9 | 9 | 10 | 10 | 10 |
| discount | | | | | | | |
--------------------------------------------------------------------------------
| Finance costs | 1 | 2 | 3 | 2 | 2 | 2 | 2 |
--------------------------------------------------------------------------------
| Earnings before tax | 23 | 24 | 11 | 20 | 31 | 52 | 42 |
--------------------------------------------------------------------------------
| Change in fair | -5 | -38 | 46 | 14 | 16 | -17 | -6 |
| value reserve | | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 18 | -14 | 58 | 34 | 47 | 35 | 35 |
| at fair value | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Key ratios, % | | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | 23.8 | -14.4 | 44.1 | 27.6 | 35.0 | 26.9 | 23.7 |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Loss ratio | 74.3 | 70.0 | 76.8 | 73.1 | 78.0 | 67.5 | 70.0 |
--------------------------------------------------------------------------------
| Operating expense | 23.8 | 21.6 | 19.9 | 22.1 | 22.9 | 21.9 | 19.4 |
| ratio | | | | | | | |
--------------------------------------------------------------------------------
| Operating combined | 98.2 | 91.6 | 96.7 | 95.3 | 100.8 | 89.3 | 89.5 |
| ratio | | | | | | | |
--------------------------------------------------------------------------------
| Expense ratio | 27.9 | 24.4 | 23.1 | 25.2 | 25.9 | 24.8 | 22.4 |
--------------------------------------------------------------------------------
| Combined ratio | 102.2 | 94.4 | 99.9 | 98.3 | 103.9 | 92.3 | 92.4 |
--------------------------------------------------------------------------------
| Return on | 1.5 | -0.5 | 2.5 | 1.5 | 2.4 | 1.0 | 1.1 |
| investment at fair | | | | | | | |
| value | | | | | | | |
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| | | | | | | | |
--------------------------------------------------------------------------------
| | 31 | 30 | 30 | 31 | 31 | 30 | 30 |
| | March | June | Sept | Dec | March | June | Sept |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Volume data, EUR | | | | | | | |
| billion | | | | | | | |
--------------------------------------------------------------------------------
| Insurance contract | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Discounted | 1,184 | 1,194 | 1,207 | 1,223 | 1,241 | 1,268 | 1,280 |
| insurance contract | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Other insurance | 914 | 857 | 818 | 746 | 954 | 905 | 837 |
| contract | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Investment | | | | | | | |
| portfolio | | | | | | | |
--------------------------------------------------------------------------------
| Bonds | 1,790 | 1,825 | 1,802 | 1,752 | 1,697 | 1,697 | 1,634 |
--------------------------------------------------------------------------------
| Money market | 379 | 266 | 397 | 22 | 19 | 20 | 103 |
| investments | | | | | | | |
--------------------------------------------------------------------------------
| Equities | 422 | 392 | 378 | 447 | 489 | 471 | 473 |
--------------------------------------------------------------------------------
| Investment property | 60 | 58 | 53 | 56 | 60 | 69 | 74 |
--------------------------------------------------------------------------------
| Alternative | 65 | 43 | 75 | 87 | 133 | 166 | 172 |
| investments | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Average personnel | 2,099 | 2,134 | 2,204 | 2,154 | 2,182 | 2,205 | 2,248 |
--------------------------------------------------------------------------------
July-September
Earnings
Earnings before tax came to EUR 42 million (11).
Insurance premium revenue
Insurance premium revenue grew by 10% to EUR 217 million (196).
The Private Customers division showed the strongest growth, with insurance
premium revenue increasing to EUR 94 million (75) as a result of cooperation
within OP-Pohjola Group and of upgraded service offerings. The Corporate
Customers division recorded the largest monetary and proportional growth in
premium revenue of comprehensive motor vehicle and motor liability insurance.
Premium revenue generated by the Baltic business increased by 12% to EUR 14
million (13).
Claims incurred and operating expenses
The reported operating combined ratio stood at 89.5% (96.7), of which claims
incurred accounted for 64.5% (71.0). The ratio of operating expenses to loss
adjustment expenses (cost ratio) fell to 25.0% (25.7).
Claims incurred (excl. loss adjustment expenses) were EUR 141 million (141), of
which major and medium-sized losses (in excess of EUR 0.1 million) accounted for
EUR 25 million (29). The number of major losses of over EUR 2 million retained
for own account was 3 (5). The upward trend in motor liability and motor vehicle
insurance claims levelled off.
Operating expenses and loss adjustment expenses rose to EUR 53 million (49), the
former accounting for EUR 42 million (39) and the latter for EUR 11 million
(10). This increase in expenses is mainly attributable to higher costs in
insurance sales and loss adjustment.
Investment operations
On September 30, the fair value of Non-life Insurance investments amounted to
EUR 2.5 billion (2.4), with equities accounting for 18% (17) and money market
instruments for 4% (1).
Despite uncertain financial markets, return on these investments at fair value
stood at 1.1%. Net investment income recognised in earnings amounted to EUR 38
million (32) and net investment income at fair value reached EUR 32 million
(69).
The discount rate for pension liabilities worth EUR 1.3 billion (1.2) was 3.3%
(3.3). The unwinding of discount is recognised as a
post-balance-on-technical-account item.
January-September
Earnings before tax amounted to EUR 125 million (58).
Insurance premium revenue increased by 10% to EUR 639 million (584). The Private
Customers division showed the strongest growth, with insurance premium revenue
increasing to EUR 266 million (229) as a result of cooperation within OP-Pohjola
Group and of upgraded service offerings.
The reported operating combined ratio stood at 93.0% (95.4), of which claims
incurred accounted for 65.5% (67.4). The ratio of operating expenses to loss
adjustment expenses (cost ratio) was 27.6% (28.0).
Claims incurred (excl. loss adjustment expenses) increased to EUR 424 million
(399), of which major and medium-sized losses (in excess of EUR 0.1 million)
accounted for EUR 59 million (60). The number of major losses of over EUR 2
million retained for own account was 5 (9). The number of road traffic accidents
was higher than a year ago. The upward trend in the economy was also reflected
in a sharp increase in claims incurred under traveller's insurance.
Operating expenses and loss adjustment expenses rose to EUR 171 million (159),
the former accounting for EUR 137 million (127) and the latter for EUR 35
million (32). Operating expenses included EUR 1 million (2) in integration
expenses.
Return on investments at fair value was 4.6%. Net investment income recognised
in earnings amounted to EUR 126 million (87) and net investment income at fair
value reached EUR 119 million (91).
Operating return on equity stood at 27.7% (18.8).
OTHER OPERATIONS
Results by Other Operations consist of Group administrative expenses and funding
costs of Pohjola shares.
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| Income | | 2006 | | | | 2007 | |
| statement, | | | | | | | |
| EUR | | | | | | | |
| million | | | | | | | |
--------------------------------------------------------------------------------
| | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Net interest | -3 | -1 | -4 | -4 | -3 | -3 | -4 |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Other net income | 19 | 15 | 8 | 6 | 11 | 6 | 2 |
--------------------------------------------------------------------------------
| Income | 16 | 13 | 4 | 2 | 8 | 3 | -1 |
--------------------------------------------------------------------------------
| Expenses | 17 | 17 | 12 | 8 | 19 | 8 | 8 |
--------------------------------------------------------------------------------
| Earnings/loss | -1 | -4 | -7 | -7 | -11 | -5 | -9 |
| before tax | | | | | | | |
--------------------------------------------------------------------------------
July-September
Other Operations showed a loss of EUR 9 million before tax (loss of EUR 7
million).
January-September
Other Operations showed a loss of EUR 24 million before tax (loss of EUR 12
million).
First-quarter earnings performance was burdened by EUR 10 million in liquidated
damages related to the cancellation of partnership between Pohjola Group plc and
savings banks. Interest expenses of EUR 1 million were recognised in the second
quarter, related to the redemption of Pohjola shares held by minority
shareholders. Results for the same period a year ago included EUR 2 million in
capital gains on the sale of Eurocard shares.
FORMULAE FOR KEY RATIOS
Return on equity (ROE) at fair value
Profit for the period + Change in fair value reserve after tax /
Shareholders' equity (average of the beginning and end of period) x 100
Cost/income ratio, %
Personnel costs + Other administrative expenses + Other operating expenses /
(Net interest income + Net income from Non-life Insurance + Net commissions and
fees + Net trading income + Net investment income + Other operating income) x
100
Earnings/share (EPS)
Profit for the period attributable to equity holders of the Parent /
Average share-issue adjusted number of shares during the financial period
Earnings/share (EPS), diluted
The denominator is the average share-issue adjusted number of shares during the
financial period plus the number of shares which will be obtained if all stock
options are converted into shares, less the number of shares obtained through
the exercise of all stock options multiplied by the share subscription price and
divided by the average share price during the financial period.
Earnings/share (EPS) at fair value
(Profit for the period attributable to equity holders of the Parent + Change in
fair value reserve) /
Average share-issue adjusted number of shares during the financial period
Equity/share
Shareholders' equity /
Share-issue adjusted number of shares on the balance sheet date
Market capitalisation
Number of shares x closing price on the balance sheet date
Capital adequacy, %
Own funds /
Risk-weighted items x 100
Tier 1 ratio, %
Tier 1 own funds /
Risk-weighted items x 100
KEY RATIOS FOR NON-LIFE INSURANCE
The key ratio formulae for Non-life Insurance are based on regulations issued by
Insurance Supervisory Authority, using the corresponding IFRS sections to the
extent applicable.
The ratios are calculated using activity-based expenses applied by non-life
insurance companies, which are not presented on the same principle as in the
Consolidated Income Statement.
Loss ratio (excl. unwinding of discount)
Claims and loss adjustment expenses /
Net insurance premium revenue x 100
Expense ratio
Operating expenses + Amortisation/adjustment of intangible assets related to
company acquisition/
Net insurance premium revenue x 100
Risk ratio (excl. unwinding of discount)
Claims excl. loss adjustment expenses /
Net insurance premium revenue x 100
Cost ratio
Operating expenses and loss adjustment expenses /
Net insurance premium revenue x 100
Combined ratio (excl. unwinding of discount)
Loss ratio + expense ratio
Risk ratio + cost ratio
OPERATING KEY RATIOS
Operating return on equity (ROE), %
Banking and Investment Services:
(+ Profit for the period
+ Amortisation and write-downs on intangible assets and goodwill related to the
acquisition
of Pohjola Asset Management, and their tax effect
+ Change in fair value reserve after tax) /
(+ 7 % of risk-weighted commitments
+ Shareholders' equity of OKO Asset Management and Pohjola Property Management
- Subordinated loans allocated to business lines (average of the beginning and
end of period)) x 100
Non-life Insurance:
(+ Profit for the period
+ Amortisation and write-downs on intangible assets and goodwill
related to the acquisition of non-life business, and their tax effect
+ Change in fair value reserve after tax) /
(+ 70% solvency ratio
- Subordinated loans allocated to business lines (average of the beginning and
end of period) or
minimum capital required by the authorities, if this is larger) x 100
Operating cost/income ratio
(+ Personnel costs
+ Other administrative expenses
+ Other operating expenses excl. amortisation and write-downs on intangible
assets and goodwill related to Pohjola acquisition) /
(+ Net interest income
+ Net income from Non-life Insurance
+ Net commissions and fees
+ Net trading income
+ Net investment income
+ Other operating income) x 100
Operating expense ratio
Operating expenses /
Net insurance premium revenue x 100
Operating combined ratio
Loss ratio + operating expense ratio
Consolidated income statement, 1 July-30 September 2007
--------------------------------------------------------------------------------
| EUR million | Q3/2007 | Q3/2006 |
--------------------------------------------------------------------------------
| Interest income | 583 | 338 |
--------------------------------------------------------------------------------
| Interest expenses | 556 | 316 |
--------------------------------------------------------------------------------
| Net interest income (Note 1) | 27 | 22 |
--------------------------------------------------------------------------------
| Impairment losses on receivables | 1 | 2 |
| (Note 2) | | |
--------------------------------------------------------------------------------
| Net interest income | 26 | 20 |
| after impairment losses | | |
--------------------------------------------------------------------------------
| Net income from Non-life Insurance | 103 | 68 |
| (Note 3) | | |
--------------------------------------------------------------------------------
| Net commissions and fees (Note 4) | 24 | 25 |
--------------------------------------------------------------------------------
| Net trading income (Note 5) | -16 | 6 |
--------------------------------------------------------------------------------
| Net investment income (Note 6) | 5 | 2 |
--------------------------------------------------------------------------------
| Other operating income (Note 7) | 15 | 11 |
--------------------------------------------------------------------------------
| Total income | 156 | 131 |
--------------------------------------------------------------------------------
| Personnel costs (Note 8) | 37 | 36 |
--------------------------------------------------------------------------------
| Other administrative expenses (Note 9) | 34 | 29 |
--------------------------------------------------------------------------------
| Other operating expenses (Note 10) | 29 | 26 |
--------------------------------------------------------------------------------
| Total expenses | 100 | 92 |
--------------------------------------------------------------------------------
| Earnings before tax | 56 | 40 |
--------------------------------------------------------------------------------
| Income tax expense | 16 | -4 |
--------------------------------------------------------------------------------
| Profit for the period | 40 | 44 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per share, EUR | | |
--------------------------------------------------------------------------------
| Series A | 0.20 | 0.22 |
--------------------------------------------------------------------------------
| Series K | 0.19 | 0.22 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | | |
--------------------------------------------------------------------------------
| Series A | 0.20 | 0.22 |
--------------------------------------------------------------------------------
| Series K | 0.19 | 0.22 |
--------------------------------------------------------------------------------
Consolidated income statement, 1 January-30 September 2007
--------------------------------------------------------------------------------
| EUR million | Q1-3/2007 | Q1-3/2006 |
--------------------------------------------------------------------------------
| Interest income | 1,566 | 883 |
--------------------------------------------------------------------------------
| Interest expenses | 1,481 | 810 |
--------------------------------------------------------------------------------
| Net interest income (Note 1) | 85 | 73 |
--------------------------------------------------------------------------------
| Impairment losses on receivables | 2 | 1 |
| (Note 2) | | |
--------------------------------------------------------------------------------
| Net interest income | 83 | 72 |
| after impairment losses | | |
--------------------------------------------------------------------------------
| Net income from Non-life Insurance | 310 | 244 |
| (Note 3) | | |
--------------------------------------------------------------------------------
| Net commissions and fees (Note 4) | 83 | 74 |
--------------------------------------------------------------------------------
| Net trading income (Note 5) | -7 | 10 |
--------------------------------------------------------------------------------
| Net investment income (Note 6) | 28 | 30 |
--------------------------------------------------------------------------------
| Other operating income (Note 7) | 51 | 37 |
--------------------------------------------------------------------------------
| Total income | 549 | 467 |
--------------------------------------------------------------------------------
| Personnel costs (Note 8) | 123 | 123 |
--------------------------------------------------------------------------------
| Other administrative expenses (Note 9) | 107 | 95 |
--------------------------------------------------------------------------------
| Other operating expenses (Note 10) | 99 | 83 |
--------------------------------------------------------------------------------
| Total expenses | 328 | 301 |
--------------------------------------------------------------------------------
| Earnings before tax | 220 | 166 |
--------------------------------------------------------------------------------
| Income tax expense | 58 | 27 |
--------------------------------------------------------------------------------
| Profit for the period | 163 | 139 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Basic earnings per share, EUR | | |
--------------------------------------------------------------------------------
| Series A | 0.80 | 0.69 |
--------------------------------------------------------------------------------
| Series K | 0.79 | 0.68 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | | |
--------------------------------------------------------------------------------
| Series A | 0.80 | 0.69 |
--------------------------------------------------------------------------------
| Series K | 0.79 | 0.68 |
--------------------------------------------------------------------------------
Consolidated balance sheet
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid assets | | 1,052 | 907 |
--------------------------------------------------------------------------------
| Receivables from financial | | 5,202 | 5,546 |
| institutions | | | |
--------------------------------------------------------------------------------
| Financial assets held for trading | | 4,256 | 4,801 |
| (Note 11) | | | |
--------------------------------------------------------------------------------
| Derivative contracts | | 559 | 320 |
--------------------------------------------------------------------------------
| Receivables from customers | | 8,891 | 7,864 |
--------------------------------------------------------------------------------
| Non-life Insurance assets (Note | | 2,913 | 2,766 |
| 12) | | | |
--------------------------------------------------------------------------------
| Investment assets (Note 13) | | 433 | 225 |
--------------------------------------------------------------------------------
| Investment in associates | | 2 | 8 |
--------------------------------------------------------------------------------
| Intangible assets (Note 14) | | 1,004 | 1,020 |
--------------------------------------------------------------------------------
| Property, plant and equipment | | 96 | 95 |
| (PPE) | | | |
--------------------------------------------------------------------------------
| Other assets | | 1,389 | 633 |
--------------------------------------------------------------------------------
| Tax assets | | 10 | 12 |
--------------------------------------------------------------------------------
| Total assets | | 25,805 | 24,196 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities to financial | | 2,320 | 2,390 |
| institutions | | | |
--------------------------------------------------------------------------------
| Financial liabilities held for | | 6 | 0 |
| trading | | | |
--------------------------------------------------------------------------------
| Derivative contracts | | 572 | 331 |
--------------------------------------------------------------------------------
| Liabilities to customers | | 2,124 | 1,994 |
--------------------------------------------------------------------------------
| Non-life Insurance liabilities | | 2,403 | 2,099 |
| (Note 15) | | | |
--------------------------------------------------------------------------------
| Debt securities issued | | 13,612 | 13,263 |
| to the | | | |
| public (Note 16) | | | |
--------------------------------------------------------------------------------
| Provisions and other liabilities | | 1,591 | 1,010 |
--------------------------------------------------------------------------------
| Tax liabilities | | 367 | 355 |
--------------------------------------------------------------------------------
| Subordinated liabilities (Note 17) | | 965 | 924 |
--------------------------------------------------------------------------------
| Total liabilities | | 23,960 | 22,368 |
--------------------------------------------------------------------------------
| Shareholders' equity | | | |
--------------------------------------------------------------------------------
| Capital and reserves attributable | | | |
| to | | | |
| equity holders of the Parent | | | |
--------------------------------------------------------------------------------
| Share capital | | 428 | 428 |
--------------------------------------------------------------------------------
| Reserves | | 782 | 793 |
--------------------------------------------------------------------------------
| Retained earnings | | 635 | 607 |
--------------------------------------------------------------------------------
| Total shareholders' equity | | 1,845 | 1,828 |
--------------------------------------------------------------------------------
| Total liabilities and | | 25,805 | 24,196 |
| shareholders' equity | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated statement of changes in equity
--------------------------------------------------------------------------------
| | | Minori | Total |
| | Attributable to equity holders of | ty | equity |
| | the Parent | intere | |
| | | st | |
--------------------------------------------------------------------------------
| EUR million | Share | Fair | Other | Retain | | |
| | capita | value | reserv | ed | | |
| | l | reserve | es | earnin | | |
| | | | | gs | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Balance at 1 January | 423 | 48 | 744 | 549 | 199 | 1,961 |
| 2006 | | | | | | |
--------------------------------------------------------------------------------
| Adjusted | 423 | 48 | 744 | 549 | 199 | 1,961 |
| shareholders' equity | | | | | | |
| on 1 January | | | | | | |
--------------------------------------------------------------------------------
| Available-for-sale | | | | | | |
| financial assets | | | | | | |
--------------------------------------------------------------------------------
| Fair value gains and | | 0 | | 0 | | -1 |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Amount transferred | | -16 | | | | -16 |
| to | | | | | | |
| income | | | | | | |
| statement | | | | | | |
--------------------------------------------------------------------------------
| Deferred taxes | | 4 | | | | 4 |
--------------------------------------------------------------------------------
| Net income | | -12 | | -1 | | -12 |
| recognised | | | | | | |
| in | | | | | | |
| shareholders' equity | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | 139 | | 139 |
| period | | | | | | |
--------------------------------------------------------------------------------
| Total recognised | | -12 | | 138 | | 127 |
| income and expenses | | | | | | |
| for the period | | | | | | |
--------------------------------------------------------------------------------
| Share issue expenses | | | -1 | | | -1 |
--------------------------------------------------------------------------------
| Stock options | 3 | | 2 | | | 5 |
| exercised | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | | | |
--------------------------------------------------------------------------------
| for series A share | | | | -95 | | -95 |
--------------------------------------------------------------------------------
| for series K share | | | | -25 | | -25 |
--------------------------------------------------------------------------------
| Acquisition of | | | | | -198 | -198 |
| subsidiaries | | | | | | |
--------------------------------------------------------------------------------
| Balance at 30 | 426 | 35 | 745 | 566 | 0 | 1,772 |
| September 2006 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | Minori | Total |
| | Attributable to equity holders of | ty | equity |
| | the Parent | intere | |
| | | st | |
--------------------------------------------------------------------------------
| EUR million | Share | Fair | Other | Retain | | |
| | capital | value | reserv | ed | | |
| | | reserv | es | earnin | | |
| | | e | | gs | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Balance at 1 January | 428 | 47 | 747 | 607 | 0 | 1,828 |
| 2007 | | | | | | |
--------------------------------------------------------------------------------
| Adjusted | 428 | 47 | 747 | 607 | 0 | ,828 |
| shareholders' equity | | | | | | |
| on 1 January | | | | | | |
--------------------------------------------------------------------------------
| Available-for-sale | | | | | | |
| financial assets | | | | | | |
--------------------------------------------------------------------------------
| Fair value gains and | | 17 | | | | 17 |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Amount transferred | | -38 | | | | -38 |
| to | | | | | | |
| income | | | | | | |
| statement | | | | | | |
--------------------------------------------------------------------------------
| Deferred taxes | | 5 | | | | 5 |
--------------------------------------------------------------------------------
| Net income | | -15 | | | | -15 |
| recognised | | | | | | |
| in | | | | | | |
| shareholders' equity | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | 163 | 0 | 163 |
| period | | | | | | |
--------------------------------------------------------------------------------
| Total recognised | | -15 | | 163 | 0 | 148 |
| income and | | | | | | |
| expenses | | | | | | |
| for the period | | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | | | | | | |
--------------------------------------------------------------------------------
| for series A share | | | | -104 | | -104 |
--------------------------------------------------------------------------------
| for series K share | | | | -27 | | -27 |
--------------------------------------------------------------------------------
| Transfer of reserves | | | 4 | -4 | | |
--------------------------------------------------------------------------------
| Balance at 30 | 428 | 32 | 750 | 635 | 0 | 1,845 |
| September 2007 | | | | | | |
--------------------------------------------------------------------------------
Own funds and capital adequacy
--------------------------------------------------------------------------------
| EUR million | 30 Sept | 30 | 31 | 31 |
| | 2007 | June | March | Dec |
| | | 200 | 20 | 2006 |
| | | 7 | 07 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Own funds | | | | |
--------------------------------------------------------------------------------
| Equity capital | 1,845 | 1,813 | 1,758 | 1,828 |
--------------------------------------------------------------------------------
| Minority interest | 0 | 0 | 0 | 1 |
--------------------------------------------------------------------------------
| Hybrid capital *) | 224 | 224 | 224 | 224 |
--------------------------------------------------------------------------------
| Intangible assets | -850 | -854 | -855 | -859 |
--------------------------------------------------------------------------------
| Fair value reserve, excess | -129 | -122 | -127 | -115 |
| funding of | | | | |
| pension liability, | | | | |
| change in equalisation | | | | |
| | | | | |
| provision and change in fair | | | | |
| value of | | | | |
| investment property | | | | |
--------------------------------------------------------------------------------
| Dividend distribution proposed | - | - | - | -131 |
| by | | | | |
| Board of Directors | | | | |
--------------------------------------------------------------------------------
| Planned dividend distribution | -81 | -61 | -25 | - |
--------------------------------------------------------------------------------
| Tier 1 funds | 1,010 | 999 | 975 | 948 |
--------------------------------------------------------------------------------
| Fair value reserve | 32 | 39 | 57 | 47 |
--------------------------------------------------------------------------------
| Subordinated liabilities | 299 | 299 | 200 | 200 |
| included in | | | | |
| upper Tier 2 funds | | | | |
--------------------------------------------------------------------------------
| Subordinated liabilities | 489 | 491 | 488 | 474 |
| included in | | | | |
| lower Tier 2 funds | | | | |
--------------------------------------------------------------------------------
| Tier 2 funds **) | 820 | 828 | 745 | 721 |
--------------------------------------------------------------------------------
| Investment in insurance | -166 | -163 | -163 | -157 |
| companies | | | | |
--------------------------------------------------------------------------------
| Other deduction items | -1 | -1 | -8 | -8 |
--------------------------------------------------------------------------------
| Total deduction items | -167 | -164 | -171 | -165 |
--------------------------------------------------------------------------------
| Total own funds ***) | 1,663 | 1,663 | 1,550 | 1,504 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Risk-weighted receivables, | | | | |
| investments | | | | |
| and | | | | |
| off-balance-sheet commitments | | | | |
--------------------------------------------------------------------------------
| Loan and guarantee portfolio | 8,551 | 8,446 | 7,995 | 7,635 |
| excl. | | | | |
| intra-Group items of | | | | |
| OP-Pohjola Group | | | | |
--------------------------------------------------------------------------------
| Binding standby credit | 1,362 | 1,258 | 1,322 | 1,408 |
| facilities | | | | |
--------------------------------------------------------------------------------
| Intra-Group items of OP-Pohjola | 1,098 | 1,075 | 1,230 | 1,169 |
| Group | | | | |
--------------------------------------------------------------------------------
| Market risk | 1,395 | 1,290 | 1,302 | 1,007 |
--------------------------------------------------------------------------------
| Other items (equities incl. | 404 | 396 | 389 | 407 |
| Pohjola, | | | | |
| properties, other | | | | |
| assets etc.) | | | | |
--------------------------------------------------------------------------------
| Total risk-weighted receivables, | 12,809 | 12,465 | 12,239 | 11,627 |
| investments | | | | |
| and | | | | |
| off-balance-sheet items | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital adequacy ratio, % | 13.0 | 13.3 | 12.7 | 12.9 |
--------------------------------------------------------------------------------
| Ratio of Tier 1 to total | 7.9 | 8.0 | 8.0 | 8.2 |
| risk-weighted items, % | | | | |
--------------------------------------------------------------------------------
| Capital adequacy ratio under the | 1.14 | 1.16 | 1.12 | 1.13 |
| Act on Supervision of Financial | | | | |
| and Insurance Conglomerates | | | | |
--------------------------------------------------------------------------------
OP-Pohjola Group's capital adequacy ratio under the Credit Institutions Act
stood at 14.1% and the ratio of Tier 1 to total risk-weighted items at 12.7%.
OP-Pohjola Group's capital adequacy ratio calculated using the consolidation
method, under the Act on the Supervision of Financial and Insurance
Conglomerates, was 1.54.
*) OKO Bank has four loans under hybrid capital classified as Tier I funds:
Hybrid capital of 10 billion Japanese yen of which EUR 74 million has been
regarded as Tier 1 funds. The loan carries a fixed interest rate of 4.23% until
2034 and thereafter a variable 6-month Yen LIBOR + 1.58%.If interest cannot be
paid for a given interest period, the obligation to pay interest will lapse. The
loan may be called in at the earliest in 2014.
Hybrid capital of EUR 50 million, which is a perpetual loan without interest
rate step-ups, but with an 8% interest rate cap. Issued on 31 March 2005, the
loan carries an interest rate of 6.5% for the first year. Thereafter, the
interest rate will be CMS 10 years + 0.1%, payable on an annual basis. Subject
to authorisation by the Financial Supervision Authority, the loan may be called
in at the earliest in 2010.
Hybrid capital of EUR 60 million, which is a perpetual loan. Issued on 30
November 2005, the loan carries a variable interest rate based on 3-month
Euribor + 0.65% until 2015 and thereafter variable 3-month Euribor+1.65%,
payable on a quarterly basis. If interest cannot be paid for a given interest
period, the obligation to pay interest will lapse.
Subject to authorisation by the Financial Supervision Authority, the loan may be
called in at the earliest in 2015.
Hybrid capital of EUR 40 million, which is a perpetual loan. Issued on 30
November 2005, the loan carries a variable interest rate based on 3-month
Euribor + 1.25%, payable on a quarterly basis. If interest cannot be paid for a
given interest period, the obligation to pay interest will lapse. Subject to
authorisation by the Financial Supervision Authority, the loan may be called in
at the earliest in 2010.
The hybrid capital has been hedged against the interest rate and currency risk
based on interest rate and currency swaps on the date of issue.
**) Issues and repayments of loans included in Tier 2 during 1July-30 September
2007:
Debenture loan of EUR 6 million classified as lower Tier 2 funds fell due for
payment on 29 August 2007. The period saw no issues.
***) Based on special permission given by the Financial Supervision Authority in
accordance with subsection 5, section 75 of the Credit Institutions Act, the
following investments in venture capital funds, totalling EUR 4 million and
managed by OKO Venture Capital Ltd, have not been deducted from own funds:
Promotion Equity I Ky, Promotion Capital I Ky, Promotion Bridge I Ky and Suomi
Välirahoitusrahasto I Ky.
--------------------------------------------------------------------------------
| Consolidated cash flow statement | | | |
--------------------------------------------------------------------------------
| EUR million | | Q1-3/2007 | Q1-3/2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | |
--------------------------------------------------------------------------------
| Profit for the period | | 163 | 139 |
--------------------------------------------------------------------------------
| Adjustments to profit for the period | | 157 | 189 |
--------------------------------------------------------------------------------
| Increase (-) or decrease (+) | | -1,406 | -3,844 |
| in | | | |
| operating assets | | | |
--------------------------------------------------------------------------------
| Receivables from financial | | 276 | -700 |
| institutions | | | |
--------------------------------------------------------------------------------
| Financial assets held for trading | | 555 | -1,446 |
--------------------------------------------------------------------------------
| Derivative contracts | | -60 | -28 |
--------------------------------------------------------------------------------
| Receivables from customers | | -1,036 | -902 |
--------------------------------------------------------------------------------
| Non-life Insurance assets | | -152 | -421 |
--------------------------------------------------------------------------------
| Investment assets | | -210 | 41 |
--------------------------------------------------------------------------------
| Other assets | | -777 | -388 |
--------------------------------------------------------------------------------
| Increase (+) or decrease (-) | | 875 | 1,221 |
| in | | | |
| operating liabilities | | | |
--------------------------------------------------------------------------------
| Liabilities to financial | | -71 | 378 |
| institutions | | | |
--------------------------------------------------------------------------------
| Financial liabilities held for | | 6 | -4 |
| trading | | | |
--------------------------------------------------------------------------------
| Derivative contracts | | 63 | 35 |
--------------------------------------------------------------------------------
| Liabilities to customers | | 130 | 246 |
--------------------------------------------------------------------------------
| Non-life Insurance liabilities | | 166 | 239 |
--------------------------------------------------------------------------------
| Provisions and other liabilities | | 581 | 326 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income tax paid | | -43 | -34 |
--------------------------------------------------------------------------------
| Dividends received | | 56 | 29 |
--------------------------------------------------------------------------------
| A. Net cash from | | -198 | -2,299 |
| operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries, net of | | -10 | -303 |
| cash acquired | | | |
--------------------------------------------------------------------------------
| Disposal of subsidiaries, net of | | 12 | 218 |
| cash disposed | | | |
--------------------------------------------------------------------------------
| Purchase of PPE and | | -13 | -14 |
| intangible | | | |
| assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of PPE and | | 16 | 2 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| B. Net cash used in | | 5 | -97 |
| investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Increases in subordinated | | 151 | 407 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Decreases in subordinated | | -108 | -164 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Increases in debt securities | | 22,243 | 23,488 |
| issued | | | |
| to the public | | | |
--------------------------------------------------------------------------------
| Decreases in debt securities | | -21,886 | -20,228 |
| issued | | | |
| to the public | | | |
--------------------------------------------------------------------------------
| Increases in share capital | | 0 | 2 |
--------------------------------------------------------------------------------
| Dividends paid | | -131 | -120 |
--------------------------------------------------------------------------------
| Other increases in equity items | | 0 | 2 |
--------------------------------------------------------------------------------
| C. Net cash used in | | 270 | 3,387 |
| financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Net increase/decrease in cash | | 77 | 990 |
| and | | | |
| cash equivalents (A+B+C) | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 1,107 | 614 |
| at | | | |
| period-start | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 1,184 | 1,604 |
| at | | | |
| period-end | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest received | | 1,324 | 733 |
--------------------------------------------------------------------------------
| Interest paid | | -1,266 | -694 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Adjustments to profit for the period | | | |
--------------------------------------------------------------------------------
| Non-cash items | | | |
--------------------------------------------------------------------------------
| Impairment losses on receivables | | 2 | 1 |
--------------------------------------------------------------------------------
| Unrealised net earnings in Non-life | | 138 | 169 |
| Insurance | | | |
--------------------------------------------------------------------------------
| Change in fair value for trading | | 28 | -9 |
--------------------------------------------------------------------------------
| Unrealised net gains on | | -43 | -10 |
| foreign | | | |
| exchange operations | | | |
--------------------------------------------------------------------------------
| Change in fair value of investment | | -14 | -1 |
| property | | | |
--------------------------------------------------------------------------------
| Planned amortisation /depreciation | | 45 | 43 |
--------------------------------------------------------------------------------
| Share of associates' profits | | | |
--------------------------------------------------------------------------------
| Other | | 3 | -2 |
--------------------------------------------------------------------------------
| Items presented outside | | | |
| cash flow | | | |
| from operating activities | | | |
--------------------------------------------------------------------------------
| Capital gains, share of cash flow | | -2 | -3 |
| from investing activities | | | |
--------------------------------------------------------------------------------
| Capital losses, share of cash flow | | -1 | 1 |
| from investing activities | | | |
--------------------------------------------------------------------------------
| Total adjustments | | 157 | 189 |
--------------------------------------------------------------------------------
Segment information
--------------------------------------------------------------------------------
| Financial | Corpora | 2006 | Market | 2006 | Central | 2006 |
| performance from | te | | s | | Banking | |
| July to September | Banking | | 2007 | | 2007 | |
| EUR million | 2007 | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 26 | 21 | 2 | 3 | 3 | 2 |
--------------------------------------------------------------------------------
| Impairment losses | 1 | 2 | - | - | - | - |
| on receivables | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 25 | 20 | 2 | 3 | 3 | 2 |
| after impairment | | | | | | |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Net income from | | | | | | |
| Non-life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Net commissions and | 9 | 10 | 6 | 5 | 0 | 0 |
| fees | | | | | | |
--------------------------------------------------------------------------------
| Net trading income | -2 | 1 | 9 | 3 | 0 | 0 |
--------------------------------------------------------------------------------
| Net investment | 0 | | 0 | | - | - |
| income | | | | | | |
--------------------------------------------------------------------------------
| Other operating | 5 | 3 | 0 | 0 | 3 | 2 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Total income | 38 | 34 | 16 | 11 | 6 | 5 |
--------------------------------------------------------------------------------
| of which | | | | | 1 | 0 |
| inter-segment | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Personnel costs | -5 | -5 | -4 | -3 | 0 | 0 |
--------------------------------------------------------------------------------
| IT expenses | -2 | -1 | -2 | -1 | 0 | 0 |
--------------------------------------------------------------------------------
| Amortisation on | | | | | | |
| intangible assets | | | | | | |
| from acquisitions | | | | | | |
--------------------------------------------------------------------------------
| Other amortisation | -4 | -3 | 0 | 0 | 0 | 0 |
| and depreciation | | | | | | |
--------------------------------------------------------------------------------
| Other expenses | -3 | -4 | -1 | -2 | 0 | 0 |
--------------------------------------------------------------------------------
| Total expenses | -14 | -13 | -7 | -6 | -1 | -1 |
--------------------------------------------------------------------------------
| Share of | | | | | | |
| associates' | | | | | | |
| profits/losses | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 24 | 20 | 9 | 5 | 5 | 4 |
| *) | | | | | | |
--------------------------------------------------------------------------------
| Income tax | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key ratios % | | | | | | |
--------------------------------------------------------------------------------
| Operating | | | | | | |
| cost/income ratio | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | | | |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Return on equity at | | | | | 16.6 | 12.8 |
| fair values | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial | Treasu | 2006 | Asset | 2006 | Banking | 2006 |
| performance from | ry | | Managemen | | and | |
| July to September | 2007 | | t | | Investme | |
| EUR million | | | 2007 | | nt | |
| | | | | | Services | |
| | | | | | , | |
| | | | | | total | |
| | | | | | 2007 | |
| | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 1 | 1 | -1 | 0 | 32 | 27 |
--------------------------------------------------------------------------------
| Impairment losses | | | | | 1 | 2 |
| on receivables | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 2 | 1 | -1 | 0 | 31 | 25 |
| after impairment | | | | | | |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Net income from | | | | | | |
| Non-life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Net commissions and | 0 | 0 | 12 | 11 | 26 | 26 |
| fees | | | | | | |
--------------------------------------------------------------------------------
| Net trading income | -24 | 1 | | 0 | -16 | 6 |
--------------------------------------------------------------------------------
| Net investment | 5 | 2 | 0 | | 5 | 2 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Other operating | 0 | 0 | 0 | -1 | 8 | 4 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Total income | -18 | 4 | 11 | 9 | 53 | 62 |
--------------------------------------------------------------------------------
| of which | | | | 1 | 1 | 1 |
| inter-segment | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Personnel costs | 0 | 0 | -3 | -3 | -13 | -12 |
--------------------------------------------------------------------------------
| IT expenses | 0 | 0 | -1 | 0 | -5 | -3 |
--------------------------------------------------------------------------------
| Amortisation on | | | -1 | -1 | -1 | -1 |
| intangible assets | | | | | | |
| from acquisitions | | | | | | |
--------------------------------------------------------------------------------
| Other amortisation | 0 | 0 | 0 | 0 | -4 | -4 |
| and depreciation | | | | | | |
--------------------------------------------------------------------------------
| Other expenses | -1 | -1 | -1 | -1 | -7 | -8 |
--------------------------------------------------------------------------------
| Total expenses | -2 | -1 | -6 | -5 | -30 | -27 |
--------------------------------------------------------------------------------
| Share of | | | | | | |
| associates' | | | | | | |
| profits/losses | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | -19 | 2 | 5 | 4 | 23 | 35 |
--------------------------------------------------------------------------------
| Income tax | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key ratios, % | | | | | | |
--------------------------------------------------------------------------------
| Operating | | | 50 | 50 | 54 | 41 |
| cost/income ratio | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | | 7.7 | 16.1 |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Return on equity at | | | | | | |
| fair values | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial performance | Non-life | Non-life | Other | Other |
| from July to September | Insurance | Insurance | operations | operations |
| EUR million | 2007 | 2006 | 2007 | 2006 |
--------------------------------------------------------------------------------
| Net interest income | -1 | -2 | -4 | -4 |
--------------------------------------------------------------------------------
| Impairment losses on | | | | |
| receivables | | | | |
--------------------------------------------------------------------------------
| Net interest income after | -1 | -2 | -4 | -4 |
| impairment losses | | | | |
--------------------------------------------------------------------------------
| Net income from Non-life | 103 | 69 | -2 | |
| Insurance | | | | |
--------------------------------------------------------------------------------
| Net commissions and fees | -1 | 1 | 0 | 0 |
--------------------------------------------------------------------------------
| Net trading income | | | | 0 |
--------------------------------------------------------------------------------
| Net investment income | | | 0 | 0 |
--------------------------------------------------------------------------------
| Other operating income | 6 | 4 | 4 | 9 |
--------------------------------------------------------------------------------
| Total income | 107 | 72 | -1 | 4 |
--------------------------------------------------------------------------------
| of which inter-segment | | 0 | 3 | 5 |
| income | | | | |
--------------------------------------------------------------------------------
| Personnel costs | -23 | -22 | -1 | -2 |
--------------------------------------------------------------------------------
| IT expenses | -2 | -3 | -3 | -3 |
--------------------------------------------------------------------------------
| Amortisation on | -8 | -8 | | |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Other amortisation and | -1 | 0 | -1 | -1 |
| depreciation | | | | |
--------------------------------------------------------------------------------
| Other expenses | -31 | -26 | -2 | -5 |
--------------------------------------------------------------------------------
| Total expenses | -65 | -61 | -8 | -12 |
--------------------------------------------------------------------------------
| Share of associates' | 0 | 0 | | 0 |
| profits/losses | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 42 | 11 | -9 | -7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial performance | Eliminati | Eliminatio | OKO Bank | OKO Bank |
| from July to September | ons 2007 | ns 2006 | Group 2007 | Group 2006 |
| EUR million | | | | |
--------------------------------------------------------------------------------
| Net interest income | 0 | 1 | 27 | 22 |
--------------------------------------------------------------------------------
| Impairment losses on | | | 1 | 2 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Net interest income after | 0 | 1 | 26 | 20 |
| impairment losses | | | | |
--------------------------------------------------------------------------------
| Net income from Non-life | 1 | -1 | 103 | 68 |
| Insurance | | | | |
--------------------------------------------------------------------------------
| Net commissions and fees | -1 | -1 | 24 | 25 |
--------------------------------------------------------------------------------
| Net trading income | 0 | 0 | -16 | 6 |
--------------------------------------------------------------------------------
| Net investment income | | 0 | 5 | 2 |
--------------------------------------------------------------------------------
| Other operating income | -3 | -6 | 15 | 11 |
--------------------------------------------------------------------------------
| Total income | -3 | -7 | 156 | 131 |
--------------------------------------------------------------------------------
| of which inter-segment | -4 | -6 | | |
| income | | | | |
--------------------------------------------------------------------------------
| Personnel costs | | | -37 | -36 |
--------------------------------------------------------------------------------
| IT expenses | | | -10 | -10 |
--------------------------------------------------------------------------------
| Amortisation on | | | -9 | -9 |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Other amortisation and | | | -6 | -5 |
| depreciation | | | | |
--------------------------------------------------------------------------------
| Other expenses | 3 | 7 | -38 | -32 |
--------------------------------------------------------------------------------
| Total expenses | 3 | 7 | -100 | -92 |
--------------------------------------------------------------------------------
| Share of associates' | | 0 | 0 | 0 |
| profits/losses | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 0 | 0 | 56 | 40 |
--------------------------------------------------------------------------------
| Income tax | | | -16 | 4 |
--------------------------------------------------------------------------------
| Profit before the period | | | 40 | 44 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key ratios, % | | | | |
--------------------------------------------------------------------------------
| Operating cost/income | | | | |
| ratio | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| Return on equity at fair | | | 7.1 | 18.3 |
| values | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life Insurance by | Private | 2006 | Corporate | 2006 |
| division | Customers | | Customers | |
| | 2007 | | 2007 | |
--------------------------------------------------------------------------------
| Balance on technical | | | | |
| account, EUR million | | | | |
--------------------------------------------------------------------------------
| Insurance premium revenue | 94 | 75 | 109 | 109 |
--------------------------------------------------------------------------------
| Claims incurred | 63 | 53 | 80 | 91 |
--------------------------------------------------------------------------------
| Amortisation on | 3 | 3 | 3 | 3 |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Operating expenses | 23 | 20 | 16 | 17 |
--------------------------------------------------------------------------------
| Total expenses | 88 | 75 | 99 | 111 |
--------------------------------------------------------------------------------
| Balance on technical | 5 | -1 | 10 | -2 |
| account | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Key ratios, % | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| Loss ratio | 67.3 | 70.9 | 73.3 | 83.8 |
--------------------------------------------------------------------------------
| Expense ratio | 24.3 | 26.4 | 14.7 | 15.3 |
--------------------------------------------------------------------------------
| Operating combined ratio | 91.6 | 97.3 | 88.1 | 99.1 |
--------------------------------------------------------------------------------
| Combined ratio | 94.5 | 101.0 | 91.2 | 102.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life Insurance by | Baltic | 2006 | Total | 2006 |
| division | States | | 2007 | |
| | 2007 | | | |
--------------------------------------------------------------------------------
| Balance on technical | | | | |
| account, EUR million | | | | |
--------------------------------------------------------------------------------
| Insurance premium revenue | 14 | 13 | 217 | 196 |
--------------------------------------------------------------------------------
| Claims incurred | 9 | 6 | 152 | 151 |
--------------------------------------------------------------------------------
| Amortisation on | 0 | 0 | 6 | 6 |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Operating expenses | 3 | 3 | 42 | 39 |
--------------------------------------------------------------------------------
| Total expenses | 13 | 10 | 200 | 196 |
--------------------------------------------------------------------------------
| Balance on technical | 2 | 3 | 16 | 0 |
| account | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Key ratios, % | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | 23.7 | 44.1 |
| equity | | | | |
--------------------------------------------------------------------------------
| Loss ratio | 62.5 | 50.6 | 70.0 | 76.8 |
--------------------------------------------------------------------------------
| Expense ratio | 23.9 | 22.1 | 19.4 | 19.9 |
--------------------------------------------------------------------------------
| Operating combined ratio | 86.4 | 72.7 | 89.5 | 96.7 |
--------------------------------------------------------------------------------
| Combined ratio | 88.5 | 75.1 | 92.4 | 99.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial | Corpora | 2006 | Market | 2006 | Central | 2006 |
| performance from | te | | s | | Banking | |
| January to | Banking | | 2007 | | 2007 | |
| September | 2007 | | | | | |
| EUR million | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 76 | 63 | 13 | 10 | 9 | 10 |
--------------------------------------------------------------------------------
| Impairment losses | 2 | 1 | - | - | | |
| on receivables | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 74 | 62 | 13 | 10 | 9 | 10 |
| after impairment | | | | | | |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Net income from | | | | | | |
| Non-life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Net commissions and | 29 | 26 | 19 | 16 | 0 | 0 |
| fees | | | | | | |
--------------------------------------------------------------------------------
| Net trading income | 0 | 2 | 15 | 5 | 1 | 1 |
--------------------------------------------------------------------------------
| Net investment | 1 | 0 | 0 | 0 | | 0 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Other operating | 14 | 10 | -1 | 0 | 7 | 7 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Total income | 118 | 99 | 47 | 31 | 18 | 19 |
--------------------------------------------------------------------------------
| of which | | | | | 1 | 1 |
| inter-segment | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Personnel costs | -17 | -15 | -12 | -9 | -1 | -1 |
--------------------------------------------------------------------------------
| IT expenses | -6 | -5 | -5 | -4 | -1 | -1 |
--------------------------------------------------------------------------------
| Amortisation on | | | | | | |
| intangible assets | | | | | | |
| from acquisitions | | | | | | |
--------------------------------------------------------------------------------
| Other amortisation | -11 | -9 | -1 | -1 | 0 | 0 |
| and depreciation | | | | | | |
--------------------------------------------------------------------------------
| Other expenses | -11 | -11 | -4 | -5 | -1 | -2 |
--------------------------------------------------------------------------------
| Total expenses | -45 | -40 | -22 | -19 | -4 | -4 |
--------------------------------------------------------------------------------
| Share of | | | | | | |
| associates' | | | | | | |
| profits/losses | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 73 | 60 | 25 | 12 | 14 | 15 |
| *) | | | | | | |
--------------------------------------------------------------------------------
| Income tax | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key figures, % | | | | | | |
--------------------------------------------------------------------------------
| Operating | | | | | | |
| cost/income ratio | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | | | |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Return on equity at | | | | | 15.1 | 15.2 |
| fair values | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial | Treasu | 2006 | Asset | 2006 | Banking | 2006 |
| performance from | ry | | Managemen | | and | |
| January to | 2007 | | t | | Investme | |
| September | | | 2007 | | nt | |
| EUR million | | | | | Services | |
| | | | | | , | |
| | | | | | total | |
| | | | | | 2007 | |
| | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 0 | 3 | -2 | 0 | 96 | 85 |
--------------------------------------------------------------------------------
| Impairment losses | | | | | 2 | 1 |
| on receivables | | | | | | |
--------------------------------------------------------------------------------
| Net interest income | 0 | 3 | -2 | 0 | 94 | 84 |
| after impairment | | | | | | |
| losses | | | | | | |
--------------------------------------------------------------------------------
| Net income from | | | | | | |
| Non-life Insurance | | | | | | |
--------------------------------------------------------------------------------
| Net commissions and | 0 | 0 | 33 | 29 | 82 | 70 |
| fees | | | | | | |
--------------------------------------------------------------------------------
| Net trading income | -23 | 2 | | 0 | -7 | 10 |
--------------------------------------------------------------------------------
| Net investment | 22 | 23 | 0 | | 23 | 23 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Other operating | 1 | 1 | 1 | 0 | 22 | 18 |
| income | | | | | | |
--------------------------------------------------------------------------------
| Total income | -1 | 29 | 33 | 29 | 214 | 205 |
--------------------------------------------------------------------------------
| of which | | | 1 | 1 | 1 | 2 |
| inter-segment | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Personnel costs | -1 | -1 | -11 | -11 | -43 | -38 |
--------------------------------------------------------------------------------
| IT expenses | -1 | -1 | -2 | -1 | -14 | -11 |
--------------------------------------------------------------------------------
| Amortisation on | | | -2 | -2 | -2 | -2 |
| intangible assets | | | | | | |
| from acquisitions | | | | | | |
--------------------------------------------------------------------------------
| Other amortisation | 0 | 0 | 0 | 0 | -13 | -11 |
| and depreciation | | | | | | |
--------------------------------------------------------------------------------
| Other expenses | -2 | -2 | -4 | -5 | -22 | -24 |
--------------------------------------------------------------------------------
| Total expenses | -4 | -4 | -19 | -19 | -94 | -86 |
--------------------------------------------------------------------------------
| Share of | | | | | | |
| associates' | | | | | | |
| profits/losses | | | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | -5 | 25 | 13 | 10 | 120 | 120 |
--------------------------------------------------------------------------------
| Income tax | | | | | | |
--------------------------------------------------------------------------------
| Profit for the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key ratios, % | | | | | | |
--------------------------------------------------------------------------------
| Operating | | | 53 | 58 | 43 | 41 |
| cost/income ratio | | | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | | 14.2 | 16.2 |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Return on equity at | | | | | | |
| fair values | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial performance | Non-life | Non-life | Other | Other |
| from January to September | Insurance | Insurance | operations | operations |
| EUR million | 2007 | 2006 | 2007 | 2006 |
--------------------------------------------------------------------------------
| Net interest income | -5 | -6 | -9 | -9 |
--------------------------------------------------------------------------------
| Impairment losses on | | | | |
| receivables | | | | |
--------------------------------------------------------------------------------
| Net interest income after | -5 | -6 | -9 | -9 |
| impairment losses | | | | |
--------------------------------------------------------------------------------
| Net income from Non-life | 312 | 246 | -2 | 0 |
| Insurance | | | | |
--------------------------------------------------------------------------------
| Net commissions and fees | 5 | 6 | 0 | -1 |
--------------------------------------------------------------------------------
| Net trading income | | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Net investment income | | -1 | 4 | 8 |
--------------------------------------------------------------------------------
| Other operating income | 24 | 13 | 16 | 34 |
--------------------------------------------------------------------------------
| Total income | 336 | 258 | 10 | 33 |
--------------------------------------------------------------------------------
| of which inter-segment | | 0 | 8 | 25 |
| income | | | | |
--------------------------------------------------------------------------------
| Personnel costs | -76 | -76 | -4 | -10 |
--------------------------------------------------------------------------------
| IT expenses | -7 | -10 | -10 | -11 |
--------------------------------------------------------------------------------
| Amortisation on | -25 | -25 | | |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Other amortisation and | -2 | -1 | -3 | -3 |
| depreciation | | | | |
--------------------------------------------------------------------------------
| Other expenses | -100 | -88 | -18 | -21 |
--------------------------------------------------------------------------------
| Total expenses | -212 | -200 | -35 | -45 |
--------------------------------------------------------------------------------
| Share of associates' | 0 | 0 | 0 | 0 |
| profits/losses | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 125 | 58 | -24 | -12 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial performance | Eliminati | Eliminatio | OKO Bank | OKO Bank |
| from January to September | ons 2007 | ns 2006 | Group 2007 | Group 2006 |
| EUR million | | | | |
--------------------------------------------------------------------------------
| Net interest income | 3 | 2 | 85 | 73 |
--------------------------------------------------------------------------------
| Impairment losses on | | | 2 | 1 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Net interest income after | 3 | 2 | 83 | 72 |
| impairment losses | | | | |
--------------------------------------------------------------------------------
| Net income from Non-life | 0 | -2 | 310 | 244 |
| Insurance | | | | |
--------------------------------------------------------------------------------
| Net commissions and fees | -4 | -1 | 83 | 74 |
--------------------------------------------------------------------------------
| Net trading income | 0 | 0 | -7 | 10 |
--------------------------------------------------------------------------------
| Net investment income | - | 0 | 28 | 30 |
--------------------------------------------------------------------------------
| Other operating income | -11 | -28 | 51 | 37 |
--------------------------------------------------------------------------------
| Total income | -12 | -29 | 549 | 467 |
--------------------------------------------------------------------------------
| of which inter-segment | -10 | -27 | | |
| income | | | | |
--------------------------------------------------------------------------------
| Personnel costs | | | -123 | -123 |
--------------------------------------------------------------------------------
| IT expenses | 0 | 0 | -32 | -32 |
--------------------------------------------------------------------------------
| Amortisation on | | | -27 | -27 |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Other amortisation and | | | -18 | -15 |
| depreciation | | | | |
--------------------------------------------------------------------------------
| Other expenses | 11 | 29 | -129 | -104 |
--------------------------------------------------------------------------------
| Total expenses | 12 | 30 | -328 | -301 |
--------------------------------------------------------------------------------
| Share of associates' | | | 0 | 0 |
| profits/losses | | | | |
--------------------------------------------------------------------------------
| Earnings before tax | 0 | 0 | 220 | 166 |
--------------------------------------------------------------------------------
| Income tax | | | -58 | -27 |
--------------------------------------------------------------------------------
| Profit before the period | | | 163 | 139 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Key ratios, % | | | | |
--------------------------------------------------------------------------------
| Operating cost/income | | | | |
| ratio | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| Return on equity at fair | | | 10.8 | 9.1 |
| values | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life Insurance by | Private | 2006 | Corporate | 2006 |
| division | Customers | | Customers | |
| | 2007 | | 2007 | |
--------------------------------------------------------------------------------
| Balance on technical | | | | |
| account, EUR million | | | | |
--------------------------------------------------------------------------------
| Insurance premium revenue | 266 | 229 | 332 | 321 |
--------------------------------------------------------------------------------
| Claims incurred | 174 | 156 | 256 | 255 |
--------------------------------------------------------------------------------
| Amortisation on | 8 | 8 | 10 | 10 |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Operating expenses | 72 | 61 | 54 | 57 |
--------------------------------------------------------------------------------
| Total expenses | 255 | 225 | 321 | 322 |
--------------------------------------------------------------------------------
| Balance on technical | 11 | 4 | 11 | -1 |
| account | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Key ratios, % | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| Loss ratio | 65.4 | 68.1 | 77.2 | 79.4 |
--------------------------------------------------------------------------------
| Expense ratio | 27.2 | 26.6 | 16.3 | 17.9 |
--------------------------------------------------------------------------------
| Operating combined ratio | 92.6 | 94.7 | 93.5 | 97.3 |
--------------------------------------------------------------------------------
| Combined ratio | 95.7 | 98.4 | 96.6 | 100.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-life Insurance by | Baltic | 2006 | Total | 2006 |
| division | States | | 2007 | |
| | 2007 | | | |
--------------------------------------------------------------------------------
| Balance on technical | | | | |
| account, EUR million | | | | |
--------------------------------------------------------------------------------
| Insurance premium revenue | 41 | 34 | 639 | 584 |
--------------------------------------------------------------------------------
| Claims incurred | 28 | 19 | 458 | 430 |
--------------------------------------------------------------------------------
| Amortisation on | 1 | 1 | 19 | 20 |
| intangible assets from | | | | |
| acquisitions | | | | |
--------------------------------------------------------------------------------
| Operating expenses | 10 | 9 | 137 | 127 |
--------------------------------------------------------------------------------
| Total expenses | 39 | 29 | 614 | 577 |
--------------------------------------------------------------------------------
| Balance on technical | 2 | 5 | 25 | 7 |
| account | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Key ratios, % | | | | |
--------------------------------------------------------------------------------
| Operating return on | | | 27.7 | 18.8 |
| equity | | | | |
--------------------------------------------------------------------------------
| Loss ratio | 67.2 | 56.7 | 71.7 | 73.7 |
--------------------------------------------------------------------------------
| Expense ratio | 24.7 | 25.5 | 21.4 | 21.8 |
--------------------------------------------------------------------------------
| Operating combined ratio | 91.9 | 82.2 | 93.0 | 95.4 |
--------------------------------------------------------------------------------
| Combined ratio | 94.1 | 84.9 | 96.0 | 98.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Corpora | Market | Central | Treasur | Asset | Banking |
| 30 September | te | s | Banking | y | Managemen | and |
| 2007 | Banking | | | | t | Investmen |
| EUR million | | | | | | t |
| | | | | | | Services, |
| | | | | | | total |
--------------------------------------------------------------------------------
| Receivables | 8,837 | 7 | 59 | 1 | | 8,905 |
| from | | | | | | |
| customers | | | | | | |
--------------------------------------------------------------------------------
| Receivables | 187 | 78 | 5,639 | 353 | 3 | 6,259 |
| from | | | | | | |
| financial | | | | | | |
| institutions | | | | | | |
--------------------------------------------------------------------------------
| Non-life | | | | | | |
| insurance | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Financial | 373 | 1,050 | 1,971 | 1,236 | 20 | 4,650 |
| assets for | | | | | | |
| trading and | | | | | | |
| investment | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Investments | | | | | | |
| in associates | | | | | | |
--------------------------------------------------------------------------------
| Other assets | 339 | 1,476 | 52 | 121 | 129 | 2,116 |
--------------------------------------------------------------------------------
| Total assets | 9,737 | 2,610 | 7,721 | 1,711 | 152 | 21,930 |
--------------------------------------------------------------------------------
| Liabilities | 343 | 27 | 1,005 | 817 | | 2,191 |
| to customers | | | | | | |
--------------------------------------------------------------------------------
| Liabilities | 0 | 331 | 1,782 | 210 | | 2,323 |
| to financial | | | | | | |
| institutions | | | | | | |
--------------------------------------------------------------------------------
| Non-life | | | | | | |
| insurance | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Debt | | | | 13,782 | | 13,782 |
| securities | | | | | | |
| issued to the | | | | | | |
| public | | | | | | |
--------------------------------------------------------------------------------
| Subordinated | | | | 965 | | 965 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Other | 387 | 1,158 | 36 | 509 | 14 | 2,103 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Total | 730 | 1,516 | 2,822 | 16,282 | 14 | 21,364 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | |
| Capital | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | |
| liabilities | | | | | | |
| and | | | | | | |
| shareholders' | | | | | | |
| equity | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 2 | 0 | 0 | 0 | 1 | 5 |
| expenditure | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Non-life | Other | Eliminatio | OKO Bank Group |
| 30 September 2007 | Insurance | Operations, | ns | |
| EUR million | , | total | | |
| | total | | | |
--------------------------------------------------------------------------------
| Receivables from | | 53 | -66 | 8,891 |
| customers | | | | |
--------------------------------------------------------------------------------
| Receivables from | | 11 | -17 | 6,254 |
| financial | | | | |
| institutions | | | | |
--------------------------------------------------------------------------------
| Non-life insurance | 3,128 | | -215 | 2,913 |
| assets | | | | |
--------------------------------------------------------------------------------
| Financial assets | 0 | 44 | -5 | 4,688 |
| for trading and | | | | |
| investment assets | | | | |
--------------------------------------------------------------------------------
| Investments in | 2 | | | 2 |
| associates | | | | |
--------------------------------------------------------------------------------
| Other assets | 893 | 54 | -4 | 3,057 |
--------------------------------------------------------------------------------
| Total assets | 4,023 | 161 | -308 | 25,805 |
--------------------------------------------------------------------------------
| Liabilities to | | 18 | -85 | 2,124 |
| customers | | | | |
--------------------------------------------------------------------------------
| Liabilities to | 0 | 0 | -2 | 2,320 |
| financial | | | | |
| institutions | | | | |
--------------------------------------------------------------------------------
| Non-life insurance | 2,403 | | | 2,403 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Debt securities | | | -170 | 13,612 |
| issued to the | | | | |
| public | | | | |
--------------------------------------------------------------------------------
| Subordinated | 40 | | -40 | 965 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 59 | 385 | -11 | 2,537 |
--------------------------------------------------------------------------------
| Total liabilities | 2,503 | 403 | -309 | 23,960 |
--------------------------------------------------------------------------------
| Shareholders' | | | | 1,845 |
| equity | | | | |
--------------------------------------------------------------------------------
| Total liabilities | | | | 25,805 |
| and shareholders' | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 7 | 2 | | 13 |
| expenditure | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Corpora | Market | Central | Treasur | Asset | Banking |
| 31 December | te | s | Banking | y | Managemen | and |
| 2006 | Banking | | | | t | Investmen |
| EUR million | | | | | | t |
| | | | | | | Services, |
| | | | | | | total |
--------------------------------------------------------------------------------
| Receivables | 7 788 | 12 | 58 | 9 | | 7 868 |
| from | | | | | | |
| customers | | | | | | |
--------------------------------------------------------------------------------
| Receivables | 300 | 58 | 5 785 | 463 | 1 | 6 607 |
| from | | | | | | |
| financial | | | | | | |
| institutions | | | | | | |
--------------------------------------------------------------------------------
| Non-life | | | | | | |
| insurance | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Financial | 336 | 851 | 2 284 | 1 512 | 23 | 5 006 |
| assets for | | | | | | |
| trading and | | | | | | |
| investment | | | | | | |
| assets | | | | | | |
--------------------------------------------------------------------------------
| Investments | | | | | | |
| in associates | | | | | | |
--------------------------------------------------------------------------------
| Other assets | 177 | 563 | 51 | 75 | 128 | 994 |
--------------------------------------------------------------------------------
| Total assets | 8 602 | 1 484 | 8 177 | 2 059 | 152 | 20 475 |
--------------------------------------------------------------------------------
| Liabilities | 358 | 5 | 981 | 839 | | 2 184 |
| to customers | | | | | | |
--------------------------------------------------------------------------------
| Liabilities | | 259 | 1 752 | 381 | | 2 391 |
| to financial | | | | | | |
| institutions | | | | | | |
--------------------------------------------------------------------------------
| Non-life | | | | | | |
| insurance | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Debt | | | | 13 898 | | 13 898 |
| securities | | | | | | |
| issued to the | | | | | | |
| public | | | | | | |
--------------------------------------------------------------------------------
| Subordinated | | | | 924 | | 924 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Other | 406 | 475 | 35 | 284 | 14 | 1 214 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Total | 764 | 740 | 2 767 | 16 327 | 14 | 20 611 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | | | |
| Capital | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | | | |
| liabilities | | | | | | |
| and | | | | | | |
| shareholders' | | | | | | |
| equity | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital | 5 | 1 | 0 | 2 | 1 | 9 |
| expenditure | | | | | | |
--------------------------------------------------------------------------------
| Amortisation | -13 | -1 | 0 | 0 | -3 | -18 |
| and | | | | | | |
| depreciation | | | | | | |
| during the | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Other items | 2 | 0 | 0 | 1 | 1 | 4 |
| non-cash | | | | | | |
| items excl. | | | | | | |
| amortisation | | | | | | |
| and | | | | | | |
| depreciation | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance sheet | Non-life | Other | Eliminatio | OKO Bank Group |
| 31 December 2006 | Insurance | Operations, | ns | |
| EUR million | , | total | | |
| | total | | | |
--------------------------------------------------------------------------------
| Receivables from | | | -4 | 7 864 |
| customers | | | | |
--------------------------------------------------------------------------------
| Receivables from | | 66 | -220 | 6 453 |
| financial | | | | |
| institutions | | | | |
--------------------------------------------------------------------------------
| Non-life insurance | 2 824 | | -58 | 2 766 |
| assets | | | | |
--------------------------------------------------------------------------------
| Financial assets | 0 | 687 | -666 | 5 026 |
| for trading and | | | | |
| investment assets | | | | |
--------------------------------------------------------------------------------
| Investments in | 2 | 7 | | 8 |
| associates | | | | |
--------------------------------------------------------------------------------
| Other assets | 901 | 298 | -113 | 2 079 |
--------------------------------------------------------------------------------
| Total assets | 3 726 | 1 058 | -1 061 | 24 196 |
--------------------------------------------------------------------------------
| Liabilities to | | 140 | -330 | 1 994 |
| customers | | | | |
--------------------------------------------------------------------------------
| Liabilities to | | | -1 | 2 390 |
| financial | | | | |
| institutions | | | | |
--------------------------------------------------------------------------------
| Non-life insurance | 2 099 | | | 2 099 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Debt securities | | | -635 | 13 263 |
| issued to the | | | | |
| public | | | | |
--------------------------------------------------------------------------------
| Subordinated | 40 | | -40 | 924 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Other liabilities | 156 | 384 | -57 | 1 697 |
--------------------------------------------------------------------------------
| Total liabilities | 2 295 | 523 | -1 062 | 22 368 |
--------------------------------------------------------------------------------
| Shareholders' | | | | 1 828 |
| equity | | | | |
--------------------------------------------------------------------------------
| Total liabilities | | | | 24 196 |
| and shareholders' | | | | |
| equity | | | | |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| Capital | 10 | 3 | | 21 |
| expenditure | | | | |
--------------------------------------------------------------------------------
| Amortisation and | -35 | -4 | | -57 |
| depreciation | | | | |
| during the period | | | | |
--------------------------------------------------------------------------------
| Other non-cash | 0 | 0 | | 8 |
| items excl. | | | | |
| amortisation and | | | | |
| depreciation | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Notes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Net interest income | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest income | | | | |
--------------------------------------------------------------------------------
| Receivables from | 69 | 47 | 201 | 122 |
| | | | | |
| financial institutions | | | | |
--------------------------------------------------------------------------------
| Receivables from customers | 113 | 80 | 294 | 194 |
--------------------------------------------------------------------------------
| Other | 401 | 211 | 1 071 | 567 |
--------------------------------------------------------------------------------
| Total | 583 | 338 | 1 566 | 883 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest expenses | | | | |
--------------------------------------------------------------------------------
| Liabilities to financial | 21 | 30 | 63 | 78 |
| institutions | | | | |
--------------------------------------------------------------------------------
| Liabilities to customers | 22 | 13 | 59 | 36 |
--------------------------------------------------------------------------------
| Other | 514 | 273 | 1 359 | 696 |
--------------------------------------------------------------------------------
| Total | 556 | 316 | 1 481 | 810 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total net interest income | 27 | 22 | 85 | 73 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2) Impairment losses on | | | | |
| receivables | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Receivables eliminated as | 1 | 1 | 4 | 2 |
| loan or | | | | |
| guarantee losses | | | | |
--------------------------------------------------------------------------------
| Increase in impairment loss | 1 | 2 | 3 | 3 |
| provisions | | | | |
--------------------------------------------------------------------------------
| Decrease in impairment loss | -1 | -1 | -5 | -3 |
| provisions | | | | |
--------------------------------------------------------------------------------
| Total impairment losses on | 1 | 2 | 2 | 1 |
| receivables | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 3) Net income from Non-life | | | | |
| Insurance | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net insurance premium revenue | | | | |
--------------------------------------------------------------------------------
| Premiums written | 156 | 143 | 798 | 732 |
--------------------------------------------------------------------------------
| Insurance premiums ceded | -5 | -9 | -45 | -44 |
| | | | | |
| to reinsurers | | | | |
--------------------------------------------------------------------------------
| Change in provision for | 75 | 66 | -118 | -111 |
| | | | | |
| unearned premiums | | | | |
--------------------------------------------------------------------------------
| Reinsurers' share | -10 | -4 | 4 | 7 |
--------------------------------------------------------------------------------
| Total | 217 | 196 | 639 | 584 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Non-life Insurance claims | | | | |
--------------------------------------------------------------------------------
| Claims paid | 132 | 112 | 407 | 347 |
--------------------------------------------------------------------------------
| Insurance claims | -3 | 7 | -7 | 18 |
| | | | | |
| recovered from reinsurers | | | | |
--------------------------------------------------------------------------------
| Change in provision for | 9 | 32 | 24 | 41 |
| unpaid claims | | | | |
--------------------------------------------------------------------------------
| Reinsurers' share | 3 | -10 | -1 | -8 |
--------------------------------------------------------------------------------
| Total | 141 | 141 | 424 | 399 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net investment income, | | | | |
| Non-life Insurance | | | | |
--------------------------------------------------------------------------------
| Interest income | 17 | 19 | 52 | 55 |
--------------------------------------------------------------------------------
| Net realised gains and | | | | |
| realised | | | | |
| fair value | | | | |
| gains and losses | | | | |
--------------------------------------------------------------------------------
| Notes and bonds | -67 | -5 | -95 | -9 |
--------------------------------------------------------------------------------
| Shares and participations | 64 | 3 | 105 | 12 |
--------------------------------------------------------------------------------
| Investment property | 0 | 1 | 3 | 1 |
--------------------------------------------------------------------------------
| Other | 5 | 2 | 3 | 7 |
--------------------------------------------------------------------------------
| Unrealised fair value gains | | | | |
| and losses | | | | |
--------------------------------------------------------------------------------
| Notes and bonds | 0 | 0 | 0 | -1 |
--------------------------------------------------------------------------------
| Investment property | 1 | 0 | 0 | -1 |
--------------------------------------------------------------------------------
| Other | 0 | 0 | 3 | -1 |
--------------------------------------------------------------------------------
| Dividend income | 15 | 2 | 47 | 22 |
--------------------------------------------------------------------------------
| Total | 34 | 21 | 119 | 86 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Unwinding of discount | -10 | -9 | -29 | -28 |
--------------------------------------------------------------------------------
| Other | 3 | 0 | 4 | 1 |
--------------------------------------------------------------------------------
| Total net income from | 103 | 68 | 310 | 244 |
| Non-life Insurance | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 4) Net commissions and fees | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commission income | | | | |
--------------------------------------------------------------------------------
| Lending | 4 | 5 | 15 | 13 |
--------------------------------------------------------------------------------
| Payment transfers | 3 | 3 | 9 | 9 |
--------------------------------------------------------------------------------
| Securities brokerage | 6 | 4 | 19 | 15 |
--------------------------------------------------------------------------------
| Securities issuance | 1 | 2 | 5 | 5 |
--------------------------------------------------------------------------------
| Asset management and | 12 | 10 | 39 | 36 |
| | | | | |
| legal services | | | | |
--------------------------------------------------------------------------------
| Insurance operations | 0 | 1 | 5 | 4 |
--------------------------------------------------------------------------------
| Guarantees | 1 | 2 | 5 | 4 |
--------------------------------------------------------------------------------
| Other | 2 | 1 | 7 | 3 |
--------------------------------------------------------------------------------
| Total commission income | 30 | 27 | 103 | 89 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commission expenses on | | | | |
--------------------------------------------------------------------------------
| Payment transfers | 1 | 1 | 2 | 2 |
--------------------------------------------------------------------------------
| Securities brokerage | 2 | 1 | 7 | 6 |
--------------------------------------------------------------------------------
| Securities issuance | 0 | 0 | 3 | 1 |
--------------------------------------------------------------------------------
| Asset management and | 2 | 3 | 7 | 5 |
| | | | | |
| legal services | | | | |
--------------------------------------------------------------------------------
| Other | 0 | -3 | 1 | 1 |
--------------------------------------------------------------------------------
| Total commission expenses | 6 | 2 | 20 | 15 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total net commissions and | 24 | 25 | 83 | 74 |
| fees | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 5) Net trading income | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financial assets and | | | | |
| liabilities | | | | |
| held for trading | | | | |
--------------------------------------------------------------------------------
| Capital gains and losses and | | | | |
| realised changes in fair | | | | |
| value | | | | |
--------------------------------------------------------------------------------
| Notes and bonds | 1 | 1 | -8 | -6 |
--------------------------------------------------------------------------------
| Derivatives | -5 | -1 | 2 | 7 |
--------------------------------------------------------------------------------
| Unrealised changes in fair | | | | |
| value | | | | |
--------------------------------------------------------------------------------
| Notes and bonds | -21 | 19 | -34 | -19 |
--------------------------------------------------------------------------------
| Shares and participations | 0 | 0 | 0 | -1 |
--------------------------------------------------------------------------------
| Derivatives | 3 | -17 | 23 | 21 |
--------------------------------------------------------------------------------
| Net income from foreign | 5 | 3 | 10 | 8 |
| | | | | |
| exchange operations | | | | |
--------------------------------------------------------------------------------
| Total net trading income | -16 | 6 | -7 | 10 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 6) Net investment income | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Available-for-sale financial | | | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Capital gains and losses | | | | |
--------------------------------------------------------------------------------
| Shares and participations | 1 | 2 | 16 | 22 |
--------------------------------------------------------------------------------
| Dividend income | 3 | 0 | 9 | 7 |
--------------------------------------------------------------------------------
| Impairment losses | 0 | 0 | 0 | -1 |
--------------------------------------------------------------------------------
| Total | 4 | 1 | 25 | 29 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Investment property | 1 | 0 | 3 | 2 |
--------------------------------------------------------------------------------
| Total net investment income | 5 | 2 | 28 | 30 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7) Other operating income | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Central banking service fees | 2 | 2 | 7 | 7 |
--------------------------------------------------------------------------------
| Realisation of repossessed | 0 | 0 | 1 | 1 |
| items | | | | |
--------------------------------------------------------------------------------
| Rental income from assets | 0 | 3 | -1 | 8 |
| rented | | | | |
| under operating | | | | |
| lease | | | | |
--------------------------------------------------------------------------------
| Other | 12 | 6 | 45 | 21 |
--------------------------------------------------------------------------------
| Total | 15 | 11 | 51 | 37 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8) Personnel costs | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Wages and salaries | 30 | 29 | 101 | 99 |
--------------------------------------------------------------------------------
| Pension costs | 5 | 5 | 14 | 16 |
--------------------------------------------------------------------------------
| Other social expenses | 2 | 2 | 7 | 7 |
--------------------------------------------------------------------------------
| Total personnel costs | 37 | 36 | 123 | 123 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9) Other administrative | | | | |
| expenses | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Office expenses | 15 | 12 | 45 | 35 |
--------------------------------------------------------------------------------
| IT expenses | 10 | 10 | 32 | 32 |
--------------------------------------------------------------------------------
| Telecommunication expenses | 3 | 2 | 7 | 8 |
--------------------------------------------------------------------------------
| Marketing expenses | 3 | 2 | 10 | 9 |
--------------------------------------------------------------------------------
| Other administrative expenses | 3 | 3 | 13 | 10 |
--------------------------------------------------------------------------------
| Total other administrative | 34 | 29 | 107 | 95 |
| expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 10) Other operating expenses | | | | |
--------------------------------------------------------------------------------
| EUR million | Q3/07 | Q3/06 | Q1-3/07 | Q1-3/06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Expenses for property and | 7 | 5 | 19 | 17 |
| | | | | |
| business premises in own use | | | | |
--------------------------------------------------------------------------------
| Expenses for realisation of | 1 | 1 | 1 | 2 |
| repossessed items | | | | |
--------------------------------------------------------------------------------
| Planned amortisation | | | | |
| | | | | |
| and depreciation | | | | |
--------------------------------------------------------------------------------
| Amortisation on intangible | 9 | 9 | 27 | 27 |
| | | | | |
| assets related to company | | | | |
| acquisition | | | | |
--------------------------------------------------------------------------------
| Other | 6 | 5 | 18 | 15 |
--------------------------------------------------------------------------------
| Other*) | 7 | 6 | 34 | 23 |
--------------------------------------------------------------------------------
| Total other operating | 29 | 26 | 99 | 83 |
| expenses | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
*) The item includes EUR 10 million in liquidated damages, including interest
and expenses, paid by OKO Bank to savings banks on the basis of an arbitral
award. The liquidated damages were due to the termination of cooperation between
Pohjola and savings banks as a result of combining the operations of OP Bank
Group and Pohjola.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 11) Financial assets held for | | | |
| trading | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Notes and bonds | | 4,255 | 4,795 |
--------------------------------------------------------------------------------
| Shares and participations | | 1 | 6 |
--------------------------------------------------------------------------------
| Total | | 4,256 | 4,801 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12) Non-life Insurance assets | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Money market investments, | | 103 | 22 |
| money | | | |
| market funds and deposits | | | |
--------------------------------------------------------------------------------
| Bonds and long-term bond funds | | 1,634 | 1,752 |
--------------------------------------------------------------------------------
| Shares and participations | | 473 | 447 |
--------------------------------------------------------------------------------
| Alternative investments | | 172 | 87 |
--------------------------------------------------------------------------------
| Property | | 74 | 56 |
--------------------------------------------------------------------------------
| Other | | 456 | 400 |
--------------------------------------------------------------------------------
| Total | | 2,913 | 2,766 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 13) Investment property | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Available-for-sale financial assets | | | |
--------------------------------------------------------------------------------
| Notes and bonds | | 325 | 94 |
--------------------------------------------------------------------------------
| Shares and participations | | 83 | 101 |
--------------------------------------------------------------------------------
| Investment property | | 25 | 29 |
--------------------------------------------------------------------------------
| Total | | 433 | 225 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 14) Intangible assets | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill | | 504 | 494 |
--------------------------------------------------------------------------------
| Brands | | 179 | 179 |
--------------------------------------------------------------------------------
| Customer relationships pertaining to | | 256 | 274 |
| insurance contracts and policy | | | |
| acquisition costs | | | |
--------------------------------------------------------------------------------
| Other | | 65 | 73 |
--------------------------------------------------------------------------------
| Total | | 1,004 | 1,020 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 15) Non-life Insurance liabilities | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Insurance contract liabilities | | | |
--------------------------------------------------------------------------------
| Provision for unearned premiums | | 392 | 285 |
--------------------------------------------------------------------------------
| Provision for unpaid claims | | 1,724 | 1,683 |
--------------------------------------------------------------------------------
| Total | | 2,116 | 1,969 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other | | 287 | 130 |
--------------------------------------------------------------------------------
| Total | | 2,403 | 2,099 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 16) Debt securities issued to the | | | |
| public | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Bonds | | 7,899 | 7,630 |
--------------------------------------------------------------------------------
| Certificates of deposit | | 5,603 | 5,519 |
--------------------------------------------------------------------------------
| Other | | 110 | 115 |
--------------------------------------------------------------------------------
| Total | | 13,612 | 13,263 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 17) Subordinated liabilities | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Subordinated loans | | 193 | 198 |
--------------------------------------------------------------------------------
| Other | | 772 | 727 |
--------------------------------------------------------------------------------
| Total | | 965 | 924 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Collateral given | | | |
--------------------------------------------------------------------------------
| EUR million | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Given on behalf of own liabilities | | 30 | 31 Dec |
| and commitments | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
| Mortgages | | 1 | 1 |
--------------------------------------------------------------------------------
| Pledges | | 2,387 | 2,520 |
--------------------------------------------------------------------------------
| Other | | 70 | 31 |
--------------------------------------------------------------------------------
| Total collateral given | | 2,457 | 2,552 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Off-balance-sheet commitments | | | |
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Guarantees | | 530 | 534 |
--------------------------------------------------------------------------------
| Other guarantee liabilities | | 1,495 | 1,384 |
--------------------------------------------------------------------------------
| Loan commitments | | 3,476 | 3,563 |
--------------------------------------------------------------------------------
| Commitments related to | | 125 | 165 |
| short-term | | | |
| trade transactions | | | |
--------------------------------------------------------------------------------
| Other | | 432 | 421 |
--------------------------------------------------------------------------------
| Total off-balance-sheet commitments | | 6,058 | 6,066 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accounts receivable and payable from | | | |
| sale or purchase of assets on behalf | | | |
| of customers | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | | 30 | 31 Dec |
| | | Sept | 2006 |
| | | 2007 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accounts receivable | | 583 | 71 |
--------------------------------------------------------------------------------
| Accounts payable | | 593 | 70 |
--------------------------------------------------------------------------------
Derivatives held for trading and hedging on 30 September 2007
--------------------------------------------------------------------------------
| EUR million | Nominal values/remaining | Total | Fair values |
| | term to maturity | | |
--------------------------------------------------------------------------------
| | <1 | 1-5 years | >5 years | | Assets | Liabili |
| | year | | | | | ties |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Interest | 72,853 | 30,106 | 9,350 | 112,30 | 419 | 355 |
| rate | | | | 9 | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Currency | 8,702 | 1,780 | 1,158 | 11,640 | 94 | 293 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Equity and | 11 | 238 | 28 | 277 | 48 | 0 |
| index | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Credit | 40 | 131 | 0 | 171 | 0 | 0 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Other | 8 | 7 | 0 | 15 | 1 | 0 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Total | 81,614 | 32,261 | 10,536 | 124,41 | 563 | 648 |
| derivatives | | | | 2 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Derivatives held for trading and hedging on 30 September 2006
--------------------------------------------------------------------------------
| EUR million | Nominal values/remaining | Total | Fair values |
| | term to maturity | | |
--------------------------------------------------------------------------------
| | <1 year | 1-5 | >5 | | Assets | Liabilit |
| | | years | years | | | ies |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Interest rate | 35,928 | 17,662 | 5,056 | 58,646 | 165 | 170 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Currency | 5,078 | 1,013 | 357 | 6,448 | 37 | 60 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Equity and | 37 | 129 | | 166 | 26 | |
| index | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Credit | | 121 | | 121 | | 1 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Other | 8 | 15 | | 22 | 1 | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| Total | 41,051 | 18,940 | 5,413 | 65,404 | 229 | 231 |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
Other contingent liabilities and commitments
On 30 September 2007, OKO Bank's commitments to venture capital funds amounted
to EUR 15 million and Pohjola Non-Life's commitments to EUR 46 million. They are
included in the section 'Off-balance-sheet commitments'.
Related-party transactions
OKO Bank Group's related parties comprise its parent company, associates and
administrative personnel and other related-party companies. OKO Bank Group's
Parent Company is Osuuspankkikeskus Osk (OP Bank Group Central Cooperative).
OKO Bank Group's associates were Autovahinkokeskus Oy and Vahinkopalvelu Oy On
30 September 2007 and Nooa Savings Bank Ltd, Autovahinkokeskus Oy and
Vahinkopalvelu Oy on 30 September 2006.
OKO Bank Group's administrative personnel comprises OKO Bank's President and
CEO, his deputy, members and deputy members of the Board of Directors and their
close family members. Information on members and deputy members of the
Supervisory Board and their close family members was included in related-party
transactions until 30 March 2006, when the Supervisory Board was abolished.
Normal loan terms and conditions apply to loans granted to the management. Tied
to generally used reference rates, these loans with normal collateral are repaid
according to the agreed repayment schedule.
Other related-party entities include OP Pension Fund, OP Pension Foundation and
their sister companies within OP Bank Group Central Cooperative Consolidated.
Related-party transactions by 30 September 2007
--------------------------------------------------------------------------------
| | Parent | Consoli- | Admini-s | Others |
| | company | dated | trative | |
| | | associa | personne | |
| | | tes | l | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loans | 27 | | | 1,593 |
--------------------------------------------------------------------------------
| Other receivables | 63 | | | 49 |
--------------------------------------------------------------------------------
| Deposits | 0 | | | 136 |
--------------------------------------------------------------------------------
| Other liabilities | 4 | | | 60 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest income | 2 | | | 123 |
--------------------------------------------------------------------------------
| Interest expenses | 4 | | | 66 |
--------------------------------------------------------------------------------
| Dividend income | 0 | | | 4 |
--------------------------------------------------------------------------------
| Other Non-life Insurance | 2 | | | 2 |
| income | | | | |
--------------------------------------------------------------------------------
| Commission income | 1 | | | 20 |
--------------------------------------------------------------------------------
| Commission expenses | 1 | | | 2 |
--------------------------------------------------------------------------------
| Trading income | 0 | | | 1 |
--------------------------------------------------------------------------------
| Trading expenses | 0 | | | 4 |
--------------------------------------------------------------------------------
| Other operating income | 5 | | | 8 |
--------------------------------------------------------------------------------
| Operating expenses | 44 | | | 2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Off-balance-sheet commitments | | | | |
--------------------------------------------------------------------------------
| Guarantees | 0 | | | 37 |
--------------------------------------------------------------------------------
| Irrevocable commitments | 8 | | | 73 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and other short-term | | | | |
| benefits, | | | | |
| and | | | | |
| performance-based pay | | | | |
--------------------------------------------------------------------------------
| Salaries and short-term | | | 1 | |
| benefits | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Related-party holdings | | | | |
--------------------------------------------------------------------------------
| Number of shares | 60,825,897 | | 67,778 | 4,220,946 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Related-party transactions by 30 September 2006
--------------------------------------------------------------------------------
| | Parent | Consoli- | Admini-s | Others |
| | company | dated | trative | |
| | | associa | personne | |
| | | tes | l | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Loans | 50 | | | 1,615 |
--------------------------------------------------------------------------------
| Other receivables | 3 | | | 67 |
--------------------------------------------------------------------------------
| Deposits | 9 | | | 127 |
--------------------------------------------------------------------------------
| Other liabilities | 2 | | | 58 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Interest income | 1 | | | 36 |
--------------------------------------------------------------------------------
| Interest expenses | 3 | | | 8 |
--------------------------------------------------------------------------------
| Dividend income | | | | 3 |
--------------------------------------------------------------------------------
| Commission income | | | | 15 |
--------------------------------------------------------------------------------
| Commission expenses | 2 | | | 1 |
--------------------------------------------------------------------------------
| Trading expenses | | | | 0 |
--------------------------------------------------------------------------------
| Other operating income | 1 | | | 9 |
--------------------------------------------------------------------------------
| Operating expenses | 13 | | | 20 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Off-balance-sheet commitments | | | | |
--------------------------------------------------------------------------------
| Guarantees | | | | 37 |
--------------------------------------------------------------------------------
| Irrevocable commitments | 8 | | | 59 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Salaries and other short-term | | | | |
| benefits, | | | | |
| and | | | | |
| performance-based pay | | | | |
--------------------------------------------------------------------------------
| Salaries and short-term | | | 2 | |
| benefits | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Related-party holdings | | | | |
--------------------------------------------------------------------------------
| Number of shares | 60,825,897 | | 49,728 | 4,205,946 |
--------------------------------------------------------------------------------
The Interim Report for 1 July-30 September 2007 was prepared according to IAS 34
(Interim Financial Reporting), as approved by the EU.
The Financial Statements 2006 contain a description of the accounting policies
and the principles of segment reporting applied by OKO Bank Group.
Data in this Interim Report are based on unaudited figures.
Since all figures in this Interim Report are rounded off, the sum of single
figures may differ from the presented sum total.
Financial reporting for 2007
OKO Bank Group will publish its revised, long-term business and financial
targets on 27 November 2007. Accordingly, OKO will hold a meeting for analysts
and investors with Group management simultaneously in Helsinki and London on 30
November 2007.
OKO Bank Group will publish its financial statements for October-December 2007
on 14 February 2008.
Schedule for Interim Reports in 2008
Interim Report Q1 8 May
Interim Report H2 7 August
Interim Report Q1-3 6 November
Helsinki, 8 November 2007
OKO Bank plc
Board of Directors
(Translation)
Statement on the review of the OKO Bank interim report for the period 1 July-30
September 2007
To the Board of Directors of OKO Bank
We have performed a review of the OKO Bank interim report for the period 1
July-30 September 2007. The interim report has been prepared by, and is the
responsibility of, the Board of Directors and the President & CEO, as defined
under chapter 2, section 5 of the Finnish Securities Markets Act. Based on our
review, and at the request of the Board of Directors, we issue our statement on
the interim report in line with chapter 2, section 5, subsection 7 of the
Finnish Securities Markets Act.
Our review was conducted in accordance with practice statement “910 Review”
issued by the Finnish Institute of Authorised Public Accountants. The review was
planned and conducted in order to obtain reasonable assurance about whether the
interim report is free of material misstatement. The review was limited in scope
and mainly consisted of enquiries of company personnel and analytical
procedures, and thus provides less assurance than an audit. We have not
performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that would cause us to
believe that the interim report, in all material respects, would not have been
prepared in accordance with relevant rules and regulations, and that it would
not fairly present the result of operations and financial position of OKO Bank
Group, as defined in the Finnish Securities Markets Act.
Helsinki, 8 November 2007
KPMG OY AB
Sixten Nyman Raimo Saarikivi
Authorised Public Accountant Authorised Public
Accountant
This Interim Report is available at www.oko.fi/english > Press. Background
information on the Report can also be found at the same address.
Meeting for analysts
A meeting for analysts will be held in Finnish at 10.00 am on 8 November 2007
and a conference call in English on the same day between 3.30 pm and 4.30 pm,
telephone +358 20 699 121.
OKO Bank plc
Markku Koponen
Senior Vice President
DISTRIBUTION
OMX Nordic Exchange Helsinki
Major media
www.oko.fi
FOR MORE INFORMATION, please contact
Mr Mikael Silvennoinen, President and CEO, tel. +358 10 252 2549
Mr Ilkka Salonen, CFO, tel. +358 10 252 3146
Ms Marja Huhta, Senior Vice President, Head of IR, tel. +358 10 252 2037
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