2015-10-28 07:00:00 CET
2015-10-28 07:00:58 CET
REGLERAD INFORMATION
Pohjola Pankki Oyj - Interim report (Q1 and Q3)
Pohjola Group Interim Report for 1 January-30 September 2015
Pohjola Bank plc
Interim Report 1 January-30 September 2015
Stock Exchange Release 28 October 2015 at 8.00 am (EET)
Pohjola Group Interim Report for 1 January-30 September 2015
* Consolidated earnings before tax were EUR 531 million (467) and consolidated
earnings before tax at fair value amounted to EUR 392 million (519). The
return on equity was 16.4% (15.5).
* The Common Equity Tier 1 (CET1) ratio was 13.7% (12.4) as against the target
of 15%.
* Earnings reported by Banking improved by 5% to EUR 259 million (248). The
loan portfolio grew by 8% from that at the turn of the year to EUR 16.1
billion (14.9) and by 10% in the year to September. Earnings included EUR
19 million (18) in impairment loss on receivables.
* Non-life Insurance earnings rose by 18% to EUR 225 million (191). Operating
combined ratio was 86.3 (89.4). Return on investments at fair value was
1.0% (4.9).
* Earnings before tax reported by Other Operations improved year on year
thanks to higher net investment income and lower expenses in Other
Operations.
* Within Wealth Management, earnings remained at the previous year's level.
Assets under management increased by 6% in the year to September and by 2%
year on year, totalling EUR 44.0 billion (43.3).
* Change in the outlook: Consolidated earnings from continuing operations
before tax in 2015 are expected to be higher than in 2014 (previously: at
the same level or higher than in 2014). For more detailed information on the
outlook, see "Outlook towards the year end" below.
Earnings before tax, EUR million Q1-3/2015 Q1-3/2014 Change, % 2014
----------------------------------------------------------------------
Banking 259 248 5 303
Non-life Insurance 225 191 18 223
Other Operations 28 9 20
Wealth Management 19 20 -5 38
Group total 531 467 14 584
Change in fair value reserve -139 52 79
Earnings before tax at fair value 392 519 -24 663
Equity per share, EUR 10.99 10.06 10.38
Average personnel 2,461 2,579 2,563
----------------------------------------------------------------------
The above figures describe Pohjola Group as a whole without the division into
continuing and discontinued operations.Comparatives deriving from the income
statement are based on figures reported for the corresponding period a year ago.
Unless otherwise specified, balance-sheet and other cross-sectional figures on
31 December 2014 are used as comparatives.
Financial targets Q1-3/2015 Q1-3/2014 Target 2014
-------------------------------------------------------------------------------
Return on equity, % 16.4 15.5 13 14.3
Common Equity Tier 1 ratio
(CET1), % *) 13.7 12.0 15 12.4
Operating cost/income ratio
by Banking, % 27 31 < 35 33
Operating combined ratio by
Non-life Insurance, % **) 86.3 89.4 < 92 89.4
Operating expense ratio by
Non-life Insurance, % 17.4 17.4 18 18.4
Non-life Insurance solvency
ratio (under Solvency II
framework), % ***) 152.0 137.5 120 117.3
Operating cost/income ratio
by Wealth Management, % 53 49 < 45 42
Total expenses in 2015 at
the same level as at the end
of 2012 362 448 514****) 531
AA rating affirmed by at
least two credit rating
agencies or credit ratings
at least at the main
competitors' level 2 2 2 2
Dividend payout ratio at least 50%, provided
that CET 1 ratio is at least 15%. Dividend
payout ratio is 30% until CET1 ratio of 15%
has been achieved. >50 (30) 30
-------------------------------------------------------------------------------
*) Operating ratios exclude changes in reserving bases and amortisation on
intangible assets arising from the corporate acquisition.
**) The comparative figure has been adjusted to correspond to the change in the
discount rate applied since the beginning of 2015.
***) Excluding the effect of transitional provisions.
****) The expense target for 2012 has been adjusted to correspond to the change
in the accounting policies applied as of 1 January 2015 (see Note 1. Accounting
policies).
Outlook towards the year end
World economic growth will this year be slightly weaker than last year. Economic
growth in the euro-area will recover slightly over last year but will still be
sluggish. The Finnish economy is still waiting for recovery and no clear turn
for the better is on the horizon. Export demand will remain weak and price
competitiveness has not improved to the extent that it can help the export
sector which has been suffering from structural changes. Implementing the
required measures in turn strain the political situation which poses a risk on
the revival of home markets.
On the whole, growth expectations in the financial sector are still more
moderate than the long-term average. Low interest rates will erode banks' net
interest income and weaken insurance institutions' investment income. Then
again, low interest rates support customers' loan repayment capacity that has
remained stable despite the prolonged period of slow growth. Capital adequacy
and profitability in the financial sector have come to play an ever-increasing
role because of the unstable operating environment and the tighter regulatory
framework.
In spite of the weak economic environment, Pohjola Group's consolidated earnings
from continuing operations before tax in 2015 are expected to be higher than in
2014 (previous estimate: at the same level as or higher than in 2014). The most
significant uncertainties affecting earnings in 2015 relate to the rate of
business growth, impairment loss on receivables, developments in bond and
capital markets and the effect of large claims on claims expenditure.
All forward-looking statements in this report expressing the management's
expectations, beliefs, estimates, forecasts, projections and assumptions are
based on the current view of the future development in the operating environment
and the future financial performance of Pohjola Group and its various functions,
and actual results may differ materially from those expressed in the forward-
looking statements.
Helsinki, 28 October 2015
Pohjola Bank plc
Board of Directors
This Interim Report is available at www.pohjola.com > Media > Releases.
Financial reporting in 2016
Pohjola Bank plc publishes the following financial information pursuant to the
regular disclosure obligation of a securities issuer:
Schedule for Financial Statements Bulletin for 2015 and Interim Reports in
2016:
Financial Statements Bulletin 2015 4 February
2016
Interim Report Q1/2016 27 April 2016
Interim Report H1/2016 3 August 2016
Interim Report Q1-3/2016 2 November
2016
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
London Stock Exchange
SIX Swiss Exchange
Major media
www.pohjola.com, www.op.fi
For additional information, please contact
Jouko Pölönen, President and CEO, tel. +358 (0)10
253 2691
Carina Geber-Teir, Executive Vice President, Corporate Communications, tel.
+358 (0)10 252 8394
Pohjola is part of the leading Finnish customer-owned financial services group,
OP Financial Group. Pohjola provides its customers with banking, non-life
insurance and wealth management services. Pohjola is OP Financial Group's
central bank and is, together with OP Mortgage Bank, responsible for OP
Financial Group's funding operations on money and capital markets. As laid down
in the applicable law, Pohjola, its parent company OP Cooperative and the member
credit institutions are ultimately jointly and severally liable for each other's
debts and commitments. The joint liability in OP is prescribed by the Act on the
Amalgamation of Deposit Banks Act.
www.pohjola.fi
[HUG#1961938]
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