OP Yrityspankki Oyj - Half Year financial report

OP Corporate Bank plc's Interim Report for 1 January-30 June 2017

OP Corporate Bank plc
Interim Report for 1 January-30 June 2017
2 August 2017 at 9.00 am EEST

OP Corporate Bank plc's Interim Report for 1 January-30 June 2017

  * Consolidated earnings before tax were EUR 280 million (233). The return on
    equity was 11.6% (10.0).
  * Banking earnings before tax increased to EUR 167 million (113) due to higher
    net investment income and net interest income. The loan portfolio increased
    in the year to June by 10.9% to EUR 19.2 billion. The cost/income ratio was
    30.8% (38.1).
  * Non-life Insurance earnings before tax decreased to EUR 98 million (116).
    Non-life Insurance earnings were eroded particularly by weaker claims
    development than in the year before. The operating combined ratio was 92.5%
    (88.2). Net return on investments at fair value totalled EUR 78 million (-
    11).
  * Other Operations earnings before tax were EUR 16 million (3). Liquidity and
    access to funding remained good.
  * The CET1 ratio was 14.6% (14.9), while the target is 15%.
  * Unchanged outlook: OP Corporate Bank Group's consolidated earnings before
    tax are expected to be about the same as or lower than in 2016.


                                  Q1-2/2017 Q1-2/2016 Change, % Q1-4/2016
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 Earnings before tax, EUR million
-------------------------------------------------------------------------
   Banking                              167       113      47.5       260
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   Non-life Insurance                    98       116     -16.0       231
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   Other Operations                      16         3                  13
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 Group total                            280       233      20.4       504
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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 2016 are used as
comparatives.



 Financial targets           30 June 2017 31 Dec. 2016                   Target
-------------------------------------------------------------------------------
 Customer experience, NPS (-           66
 100-+100)                                          58         70, over time 90
-------------------------------------------------------------------------------
 Common Equity Tier 1 (CET1)
 ratio, %                            14.6         14.9                       15
-------------------------------------------------------------------------------
 Return on economic capital,
 %                                   18.7         17.0                       22
-------------------------------------------------------------------------------
                                                         Expenses in 2019 lower
 Expenses of present-day                                           than in 2015
 business, EUR million                495          471                    (475)
-------------------------------------------------------------------------------
 Dividend payout ratio, %               -         50.4                       50
-------------------------------------------------------------------------------



Outlook towards the year end

Both the world economy and the euro-area economy developed favourably in the
first half of the year. Economic growth in Finland was strong and broad-based:
exports and the home market rebounded, the housing market picked up and
confidence in the Finnish economy strengthened. Tailwinds in the Finnish economy
are estimated to continue for the second half of the year too. If realised,
political risks and uncertainties both in Finland and in the export markets can,
however, weaken the outlook. A threat to the Finnish economy's positive long-
term development is posed by many structural problems that still remain
unresolved.

The financial sector has adjusted very well to the new type of low interest rate
environment. While low market interest rates have retarded growth in banks' net
interest income and eroded insurance institutions' income from fixed income
investments, they also have improved customers' repayment capacity. Impairment
losses have remained low despite the slow growth that has lasted for several
years now. The most significant strategic risks in the financial sector are
currently associated with changing customer behaviour, operating environment
digitisation and more complex regulation. Industry disruption is threatening to
slow down growth and erode income generation in the years to come. In the next
few years, the financial sector will be faced with a strong need to reinvent
itself. Changes in the operating environment will emphasise the necessity of
reinvention with a long-term approach as well as the role of the management of
profitability and capital adequacy.

OP Corporate Bank Group's consolidated earnings before tax are expected to be
about the same as or lower than in 2016. The most significant uncertainties
affecting earnings relate to changes in the interest rate and investment
environment, impairment loss on receivables, the rate of business growth 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 OP Corporate Bank Group and its various
functions, and actual results may differ materially from those expressed in the
forward-looking statements.

Helsinki, 2 August 2017

OP Corporate Bank plc
Board of Directors

Financial reporting in 2017

OP Corporate Bank plc publishes the following financial information pursuant to
the regular disclosure obligation of a securities issuer:

Schedule for Interim Reports in 2017:

Interim Report Q1-Q3/2017                          1 November 2017

DISTRIBUTION
Nasdaq Helsinki Ltd
London Stock Exchange
SIX Swiss Exchange
Major media
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

OP Corporate Bank is part of the leading Finnish customer-owned financial
services group, OP Financial Group. OP Corporate Bank and OP Mortgage Bank are
responsible for OP's funding in money and capital markets. As laid down in the
applicable law, OP Corporate Bank, OP Mortgage Bank and their parent company OP
Cooperative and other OP Financial Group member credit institutions are
ultimately jointly and severally liable for each other's debts and commitments.
OP Corporate Bank acts as OP's central bank.




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Attachments:

OP Corporate Bank plc Interim report Q2 2017.pdf