2012-02-08 07:00:00 CET

2012-02-08 07:02:30 CET


REGULATED INFORMATION

English
Pohjola Pankki Oyj - Financial Statement Release

Pohjola Bank plc Financial Statements Bulletin for 1 January-31 December 2011


Pohjola Bank plc
Stock exchange release, 8 February 2012, 8.00 am (EET)
Financial Statements Release

Pohjola Bank plc Financial Statements Bulletin for 1 January-31 December 2011


Pohjola Group in 2011
- Consolidated earnings before tax amounted to EUR 258 million (308).
Consolidated earnings before tax excluding changes in reserving bases within
Non-life Insurance (a lower discount rate and higher technical provisions
arising from increased life expectancy) came to EUR 317 million (322).
Consolidated earnings before tax at fair value were EUR 78 million (291) and
return on equity at fair value stood at 3.4% (9.3).
- Banking earnings before tax rose to EUR 198 million (133). These included EUR
49 million (105) in impairment charges on receivables. The loan portfolio
increased by 9% from its level on 31 Dec. 2010 and the average margin stood at
1.34% (1.36).
- Within Non-life Insurance, insurance premium revenue rose by 6%. The combined
ratio was 97.7% (96.6). Excluding the changes in reserving basis and
amortisation on intangible assets arising from company acquisition, the
operating combined ratio stood at 89.8% (89.7). Return on investments at fair
value was -0.4% (5.1).
- Earnings before tax posted by Asset Management totalled EUR 27 million (31).
Earnings a year ago included net income of EUR 6 million deriving from corporate
transactions. Assets under management on 31 Dec. 2011 totalled EUR 31.3 billion
(35).
- Earnings before tax reported by the Group Functions decreased to EUR 24
million (61) as a result of higher funding costs and lower capital gains.
- The Board of Directors proposes that a per-share dividend of EUR 0.41 (0.40)
be paid on Series A shares and EUR 0.38 (0.37) on Series K shares. This means a
dividend payout ratio of 60%.
- Outlook: Consolidated earnings before tax for 2012 are expected to be markedly
higher than in 2011. For more detailed information on outlook, see "Outlook for
2012" below.


October-December 2011
- Consolidated earnings before tax amounted to EUR 13 million (66). Excluding
changes in reserving bases (a lower discount rate, EUR 32 million, and higher
technical provisions arising from increased life expectancy, EUR 27 million)
consolidated earnings came to EUR 72 million (80). A year ago, changes in
reserving bases and other non-recurrent items decreased earnings by EUR 14
million in net terms. Consolidated earnings before tax at fair value amounted to
EUR 13 million (18).
- Earnings before tax recorded by Banking improved to EUR 63 million (40). The
average corporate loan portfolio margin increased by 2 basis points to 1.34%
over the previous quarter. Earnings include EUR 13 million (15) in impairment
charges on receivables.
- Within Non-life Insurance, the combined ratio stood at 116.9% (110.2), the
operating combined ratio at 91.0% (93.1) and the return on investments at fair
value at 1.4% (-0.1).
- Earnings before tax posted by Asset Management were EUR 8 million (14) and the
cost/income ratio stood at 49% (55). Earnings a year ago included net income of
EUR 6 million deriving from corporate transactions.
- Earnings before tax recorded by the Group Functions amounted to EUR 5 million
(13 million).


Earnings before tax, EUR million     2011  2010 Change, %  Q4/   Q4/   Change, %
                                                          2011   2010
--------------------------------------------------------------------------------
Banking                               198   133        49    63     40        57

Non-life Insurance                      8    83       -91   -63     -2

Asset Management                       27    31       -13     8     14       -44

Group Functions                        24    61       -60     5     13       -64

Total                                 258   308       -16    13     66       -80

Change in fair value                 -180   -17               0    -47
reserve

Earnings before tax at                 78   291       -73    13     18       -28
fair value

Earnings per                         0.67  0.72            0.10   0.16
share, EUR

Earnings per share at                0.25  0.68            0.09   0.05
fair value, EUR

Equity per share, EUR                7.29  7.44

Average personnel                   3,189 3,005           3,353  3,036


Financial targets                    2011  2010       Q4/   Q4/ Target
                                                     2011  2010

Return on equity at fair value, %     3.4   9.3       5.1   2.5     13

Tier 1 ratio, %                      10.6  12.5                   >9.5

Core Tier 1 ratio, %                 10.3  10.5

Operating cost/income ratio by         35    35        32    39    <40
Banking, %

Operating combined ratio by Non-life 89.8  89.7      91.0  93.1     92
Insurance, %

Operating expense ratio by Non-life  21.8  21.3      25.6  21.3    <20
Insurance, %

Solvency ratio by Non-life             77    86                     70
Insurance, %

Operating cost/income ratio by Asset   49    53        49    55    <50
Management, %

AA rating affirmed by at least two      2     3                    > 2
credit rating agencies

Dividend payout ratio 50%, provided   60*    55                    >50
that Tier 1 > 9.5%
 *Board proposal

President and CEO Mikael Silvennoinen:
The year 2011 was a period of dichotomy in the European economy and financial
markets. In the wake of the economic stabilisation in the spring, market
volatility calmed down and funding risk premiums went down. But the situation
changed in the summer when the debt crisis exacerbated in some euro-area member
states with the result that market confidence diminished and investment returns
fell sharply in most asset classes.

As a result of the euro crisis, the supply of international financial services
decreased in the Finnish market. This only highlighted our competitive
advantages based on our local presence and customer focus.

In 2011, we hired a large number of new staff members in sales and customer
service. Indeed, our customer business volume increased markedly both within
Banking and Non-life Insurance. This good performance is evidenced by a 9%
increase in our loan portfolio and a 6% increase in insurance premium revenue.
Business growth remained steady in the fourth quarter too.

Investment income that was lower than a year ago was offset by higher income
from our customer business.  Nevertheless, consolidated earnings before tax were
lower than the year before, due to around 60 million euros recognised in the
fourth quarter as a result of changes in Non-life Insurance reserving bases. We
cut the discount rate for technical provisions related to pension liabilities
because of low interest rates, and increased non-life insurance technical
provisions because of increased life expectancy among policyholders.

The operating environment looks challenging in 2012. It is probable that the
economic growth rate in Finland and the rest of Europe will remain more slowly
than last year. However, Pohjola has entered 2012 with confidence and on solid
foundations: we are competitive in terms of our capital base and
creditworthiness, our liquidity is on a solid basis and we have good access to
market funding. We will continue to focus on what we can do the best: we promote
the prosperity, security and wellbeing of our customers.

Outlook for 2012
Within Banking, the loan portfolio grew strongly in 2011 and the growth is
expected to continue in 2012, albeit not as strongly as in 2011. The average
corporate loan margin is expected to remain at least at its current level. The
operating environment for the corporate sector will remain challenging.  The
greatest uncertainties related to Banking's financial performance in 2012 are
associated with future impairment charges on the loan portfolio.

Insurance premium revenue is expected to increase at an above-the-market-average
rate. In Non-life Insurance, the operating combined ratio is estimated to vary
between 89% and 94% in 2012, if the number of large claims is not much higher
than in 2011. Expected investment returns are largely dependent on developments
in the investment environment. The most significant uncertainties related to
Non-life Insurance's financial performance in 2012 pertain to the investment
environment and the effect of large claims on claims expenditure.

The greatest uncertainties related to Asset Management's financial performance
in 2012 are associated with the actual performance-based fees tied to the
success of investments and the amount of assets under management.

The key determinants affecting the Group Functions' financial performance
include net interest income arising from assets in the liquidity portfolio, any
capital gains or losses on notes and bonds and any impairment charges recognised
on notes and bonds in the income statement.

Consolidated earnings before tax in 2012 are expected to be markedly higher than
in 2011.

The treatment of insurance company investments in capital adequacy measurement
has a major effect on Pohjola Group's capital adequacy. The related regulatory
framework that is currently being revised is expected to be specified during
2012.

There is still great uncertainty about the economic outlook and the operating
environment. A major risk that may undermine the economic outlook is the
exacerbation of the fiscal crisis in certain euro countries. The crisis with its
repercussions may have a significant impact on the entire financial sector's
operating environment.

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

Helsinki, 8 February 2012

Pohjola Bank plc
Board of Directors

This Financial Statements Bulletin is available at www.pohjola.fi > Media >
Releases, where background information on the Bulletin can also be found.

Analyst meeting, conference call and live webcast

Pohjola will hold a briefing in English for analysts and investors on 8 February
starting at 3.00 pm Finnish time, EET (2.00 pm CET, 1.00 pm UK time, 8am US
EST). The briefing is a combined analyst meeting, conference call and live
webcast.

Analysts and investors may attend the briefing in one of the following two ways:

1) By viewing the briefing as live webcast via the internet. The link will be
available on the IR website before the briefing begins. Questions on the
internet are welcome via a question button available in the webcast window. An
on-demand webcast of the briefing can be viewed via the IR website afterwards.

2) By dialling one of the regional conference call numbers shown below.
Questions are welcome by telephone in the Q&A session according to instructions.
To participate via a conference call, please dial in 5-10 minutes before the
beginning of the event:

UK, International +44 203 043 24 36
US +1 866 458 40 87
FIN +358 923 101 527
Password: Pohjola

Press conference

Mikael Silvennoinen, Pohjola Bank plc's President and CEO, will present the
financial results in a press conference on OP-Pohjola Group's premises
(Teollisuuskatu 1b, Vallila, Helsinki), on 8 February, starting at noon.

Annual General Meeting

Pohjola Bank plc will hold its Annual General Meeting (AGM) in the Congress Wing
of the Helsinki Exhibition & Convention Centre on Tuesday 27 March 2012,
starting at 2.00 pm. Proposals by the Board of Directors to the AGM will be
published as a company release on 8 February 2012 and notice of the Meeting on
21 February 2012 when the notice will also appear in Helsingin Sanomat and
Hufvudstadsbladet. Thereafter, the Report by the Board of Directors and the
Financial Statements and other AGM documentation will also be available on the
company's website at www.pohjola.fi.

Financial reporting in 2012

Schedule for Interim Reports in 2012:

Interim Report Q1/2012: 3 May
Interim Report H1/2012: 1 August
Interim Report Q1-3/2012:31 October

DISTRIBUTION
NASDAQ OMX Helsinki Ltd
London Stock Exchange
SIX Swiss Exchange
Major media
www.pohjola.fi, www.op.fi

For additional information, please contact
Mikael Silvennoinen, President and CEO, tel. +358 (0)10 252 2549
Vesa Aho, CFO, tel. +358 (0)10 252 2336
Niina Pullinen, Senior Vice President, Investor Relations, tel. +358 (0)10
252 2748

Pohjola Bank plc is a Finnish financial services group which provides its
customers with banking, non-life insurance and asset management services. Our
mission is to promote the prosperity, security and wellbeing of our customers.
Profitable growth and an increase in company value form our key objectives.
Pohjola Group serves corporate customers in Finland and abroad by providing an
extensive range of financial, investment, cash-management and non-life insurance
services. We offer non-life insurance and private banking services to corporate
customers. Pohjola Series A shares have been listed on the Large Cap List of the
NASDAQ OMX Helsinki since 1989. The number of shareholders totals around
34,000. Pohjola's consolidated earnings before tax came to 258 million euros in
2011 and the balance sheet total amounted to 41 billion euros on 31 December
2011. Pohjola is part of OP-Pohjola Group, the leading financial services group
in Finland with over four million customers.

www.pohjola.com


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