2009-03-27 09:45:00 CET
2009-03-27 09:45:01 CET
REGULATED INFORMATION
Pohjola Pankki Oyj - Company Announcement
Pohjola's Revised Financial Targets
Not for release or distribution in the United States, Australia, Canada or Japan. Pohjola Bank plc COMPANY RELEASE Release category: Company Announcement 27 March 2009, 10.45 am Pohjola's Revised Financial Targets On 12 February 2009, Pohjola Bank plc (“Pohjola” or the “Company”) announced its intention to proceed with a capital increase of some EUR 300 million based on a rights offering to its existing shareholders. Related to this share issue, Pohjola has revised its financial targets, as follows: the minimum Tier 1 ratio target has been revised up to 9.5% from 8.5% and the return on equity (ROE) has been revised down from 15% to 13% over the cycle. At the same time, Pohjola has decided not to state any target for the operating ROE and to set its financial targets over the economic cycle, as against the previous targets that were to be achieved by the end of 2010. The higher target set for the Tier 1 ratio will also have an indirect effect on the Company's dividend policy. The long-term target for the dividend payout ratio continues to be a minimum of 50%, provided that the Tier 1 target ratio stands at a minimum of 9.5% (previously 8.5%). At the end of 2008, Pohjola Group's Tier 1 ratio, in accordance with the Finnish Act on Credit Institutions, stood at 9.6%, without taking account of the Basel II transitional rules, and at 9.4%, taking account of the Basel II transitional rules. The proposed rights offering would further increase Pohjola's year-end 2008 Tier 1 ratio to 11.9% (pro forma), without taking account of the Basel II transitional rules. The Company has taken account of the effect of the proposed rights offering and the revised Tier 1 ratio target in its new ROE target of 13%. The table below shows the revised financial targets set for the Group and its business lines over the economic cycle, as against the previous targets that were to be achieved by the end of 2010. -------------------------------------------------------------------------------- | | Previous | New targets | | | targets | over economic cycle | | | by end 2010 | | -------------------------------------------------------------------------------- | Group: | | | -------------------------------------------------------------------------------- | Return on equity at fair value | 15% | 13% | | (ROE) | | | -------------------------------------------------------------------------------- | Tier 1 ratio | >8.5% | >9.5% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Banking: | | | -------------------------------------------------------------------------------- | Operating return on equity (ROE) | 14% | - | -------------------------------------------------------------------------------- | Operating cost/income ratio | <40% | <40% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Asset Management: | | | -------------------------------------------------------------------------------- | Operating cost/income ratio | <50% | <50% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-life Insurance: | | | -------------------------------------------------------------------------------- | Operating return on equity (ROE) | >20% | - | -------------------------------------------------------------------------------- | Operating combined ratio | 92% | 92% | -------------------------------------------------------------------------------- | Operating expense ratio | <20% | <20% | -------------------------------------------------------------------------------- | Solvency ratio | 70% | 70% | -------------------------------------------------------------------------------- Pohjola Bank plc Markku Koponen For further information, please contact: Mikael Silvennoinen, President and CEO, tel. +358 (0)10 252 2549 Jouko Pölönen, CFO, tel. +358 (0)10 252 3405 Markku Koponen, Senior Vice President (Corporate Communications), tel. +358 (0)10 252 2648 Distribution NASDAQ OMX Helsinki London Stock Exchange SWX Swiss Exchange Major media www.pohjola.fi, www.op.fi Disclaimer: This document may not be distributed or sent into the United States, Australia, Canada or Japan. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. This document is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The company has not registered, and does not intend to register, any portion of any offering of its securities in the United States, and does not intend to conduct a public offering of its securities in the United States. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order or (iv) persons who are members or creditors of the company to which this communication relates, falling within article 43(2) of the Order (all such persons in (i), (ii) (iii) and (iv) above together being referred to as “relevant persons”). The securities offered are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This document is an advertisement for the purposes of applicable measures implementing Directive 2003/71/EC (such Directive, together with any applicable implementing measures in the relevant home Member State under such Directive, the (“Prospectus Directive”). A prospectus prepared pursuant to the Prospectus Directive will be published in connection with any offering of securities, and will be available at subscription locations in Finland. Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Prospectus Directive is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. This document includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the company's intentions, beliefs or current expectations concerning, among other things the company's results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the company operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future, and speak only as of the date they are made. The company cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the company's results of operations, financial condition and liquidity and the development of the industry in which the company operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in future periods. The company does not undertake any obligation to review or confirm expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this document. J.P. Morgan Securities Ltd. and Pohjola Corporate Finance Ltd are acting exclusively for the company and for no-one in connection with the offering. They will not regard any other person (whether or not a recipient of this document) as a client in relation to the offering. J.P. Morgan Securities Ltd. and Pohjola Corporate Finance Ltd will not be responsible to anyone other that the company for providing the protections afforded to their respective clients nor for giving advice in relation to the offering or any transaction or arrangement referred to in this document.
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