2010-05-05 07:00:00 CEST
2010-05-05 07:00:06 CEST
REGULATED INFORMATION
Pohjola Pankki Oyj - Interim report (Q1 and Q3)
Pohjola Bank plc Interim Report for 1 January-31 March 2010
Pohjola Bank plc Company Release, 5 May 2010, 8.00 am Release category: Interim Report Pohjola Bank plc Interim Report for 1 January-31 March 2010 January-March - Year on year, consolidated earnings before tax improved markedly to EUR 59 million (36). Earnings include EUR 33 million (21) in impairment charges on receivables. - Earnings before tax at fair value amounted to EUR 119 million (41) and return on equity at fair value stood at 15.9% (7.2). - Banking posted earnings before tax of EUR 26 million (50), with impairment charges on receivables affecting its earnings by EUR 33 million (12). - Non-life Insurance's operating combined ratio stood at 95.5% (91.3). Within Non-life Insurance, return on investments at fair value rose to 3.2% (-0.4). - Asset Management more than doubled its earnings before tax to EUR 6 million (2). Assets under management grew by 6% from the end of 2009 to EUR 34.9 billion (33.1). - Capital gains on notes and bonds improved earnings before tax posted by the Group Functions. - Outlook: Enabled by the economic recovery, impairment charges are expected to remain lower than a year ago. Consolidated earnings before tax in 2010 are expected to be at the same level as in 2009. Group financial performance and key indicators 1) -------------------------------------------------------------------------------- | Earnings before tax, € million | Q1/2010 | Q1/2009 | Change | 2009 | -------------------------------------------------------------------------------- | Banking | 26 | 50 | -24 | 117 | -------------------------------------------------------------------------------- | Non-life Insurance | 6 | -1 | 7 | 102 | -------------------------------------------------------------------------------- | Asset Management | 6 | 2 | 3 | 21 | -------------------------------------------------------------------------------- | Group Functions | 22 | -14 | 36 | 25 | -------------------------------------------------------------------------------- | Total | 59 | 36 | 22 | 265 | -------------------------------------------------------------------------------- | Change in fair value reserve | 61 | 4 | 56 | 243 | -------------------------------------------------------------------------------- | Earnings before tax at fair | 119 | 41 | 78 | 508 | | value | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Key indicators | Q1/2010 | Q1/2009 | 2009 | Target | -------------------------------------------------------------------------------- | Earnings before tax, € million | 59 | 36 | 265 | | -------------------------------------------------------------------------------- | Profit for the period, € | 43 | 25 | 194 | | | million | | | | | -------------------------------------------------------------------------------- | Return on equity, % | 15.9 | 7.2 | 19.2 | 13.0 | -------------------------------------------------------------------------------- | Balance sheet total, € billion | 37.6 | 32.2 | 35.5 | | -------------------------------------------------------------------------------- | Shareholders' equity, € billion | 2.2 | 1.6 | 2.3 | | -------------------------------------------------------------------------------- | Tier 1 ratio, % | 12.1 | 9.4 | 11.8 | >9.5 | -------------------------------------------------------------------------------- | Earnings per share, € | 0.14 | 0.10 | 0.66 | | -------------------------------------------------------------------------------- | Earnings per share, incl. | 0.28 | 0.12 | 1.27 | | | change in fair value, € | | | | | -------------------------------------------------------------------------------- | Equity per share, € | 7.04 | 7.98 | 7.09 | | -------------------------------------------------------------------------------- | Average personnel | 2,992 | 2,949 | 2,966 | | -------------------------------------------------------------------------------- 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 31 December 2009 are used as comparatives. President and CEO Mikael Silvennoinen: "Pohjola Group's financial performance in the first quarter was better than a year ago. Net interest income, net commissions and fees and net investment income developed favourably, with the result that earnings before impairments on receivables improved by almost 60%. Our impairment charges on receivables were higher than a year ago but it would seem that their growth has come to a halt as a result of the economic recovery underway. Developments in capital markets remained favourable, which contributed to markedly better earnings before tax at fair value than the year before. During the first quarter, the loan and guarantee portfolio began to increase slightly although capital spending and demand for corporate loans are still low. In line with our expectations, the average corporate loan margin rose further although the margin on new loans took a turn downwards. Higher impairment charges year on year and the normalisation of the Markets division's financial performance weakened Banking earnings from their previous year's level. Non-life Insurance recorded a good balance on technical account although the extraordinarily bad winter weather conditions increased the number of losses reported by policyholders by 35% within motor liability and motor vehicle insurance. Growth in insurance premium revenue remained strong among private customers, whereas insurance premium revenue from corporate customers decreased, especially when it comes to statutory workers' compensation insurance. Non-life Insurance return on investments at fair value developed favourably. Asset Management reported growth in assets under management and more than doubled its year-on-year earnings before tax. Recovery in the operating environment is underway but uncertainties still linger. The Basel Committee on Banking Supervision and the European Commission are currently working on amendments to the financial regulatory framework. The proposed changes in regulations are significant and, if implemented as such, may have a detrimental effect on our customers and the economic recover underway. A lot of comments have been issued on the proposed regulations and the effects of these changes are currently being reviewed. Thanks to our solid capital base and strong market position, we will have excellent opportunities to continue to implement our strategy systematically." Operating environment The world economy continued its gradual but uneven recovery in the first quarter of 2010. According to US economic indicators, growth has continued apace and the labour market is already stabilising. In Europe, on the other hand, recovery has been slower, with the upswing largely hinging on exports, while the emerging markets especially in Asia, spearheaded by China, are recovering at a high rate. The Finnish economic recovery proceeded in the first quarter, with both businesses and consumers showing improved confidence. Strong consumer confidence is witnessed by higher consumer spending and the lively housing market. Revival of the world economy and the Finnish export markets has not yet been reflected in higher export volumes. Capital spending was still low, because there was still much idle production capacity. However, housing construction has a brighter outlook. Central banks' benchmark interest rates remained exceptionally low during the first quarter. The ECB is not probably expected to raise its key interest rates until the end of 2010 at the earliest. Euribor rates were record low. The ECB has gradually begun its exit from extraordinary measures supporting the banking system's liquidity, which will be reflected in higher short-term market rates in the euro area. In Finland, the growth rate of the loan portfolio accelerated slightly in the first quarter of 2010, and the downward trend in the corporate loan portfolio prevailing throughout 2009 came to an end in the first view months of the current year. Yield performance in corporate bond markets remained favourable, as risk premiums continued to fall further. The number of issues launched remained low, with the exception of the banking sector. Concerns about widening budget deficits and mounting national debt raised country risks and widened credit spreads, especially for some small peripheral economies of the EU. Greece's fiscal problems were also reflected in the rest of the euro area and weakened the euro in the currency market. The emergency loan package provided to Greece by the EU and the IMF is aimed at restoring confidence to the market. Equity markets remained buoyant in the first quarter, with the equity market in Finland showing a markedly stronger performance on average than in the rest of Europe. This improvement has been supported by higher profit expectations, stronger leading economic indicators and views that interest rates will continue to remain low for a long time. Growth in Non-life Insurance premiums written remained tepid in Q1 and claims incurred increased at a slightly faster rate. Challenging winter conditions were reflected in an unusually large number of claims. Consolidated earnings -------------------------------------------------------------------------------- | Consolidated earnings | 2010 | 2009 | Chang | Change | Rolling | 2009 | | analysis | | | e | | | | -------------------------------------------------------------------------------- | € million | Q1 | Q1 | | % | 12-month | | -------------------------------------------------------------------------------- | Net interest income | | | | | | | -------------------------------------------------------------------------------- | Corporate Banking | 40 | 32 | 8 | 26 | 146 | 138 | -------------------------------------------------------------------------------- | Markets | 6 | 10 | -4 | -42 | 23 | 27 | -------------------------------------------------------------------------------- | Other operations | 14 | 10 | 4 | 43 | 79 | 75 | -------------------------------------------------------------------------------- | Total | 60 | 52 | 8 | 16 | 249 | 241 | -------------------------------------------------------------------------------- | Net commissions and | 40 | 30 | 10 | 32 | 153 | 143 | | fees | | | | | | | -------------------------------------------------------------------------------- | Net trading income | 7 | 25 | -18 | -71 | 54 | 71 | -------------------------------------------------------------------------------- | Net investment income | 18 | -9 | 27 | | 14 | -13 | -------------------------------------------------------------------------------- | Net income from | | | | | | | | Non-life Insurance | | | | | | | -------------------------------------------------------------------------------- | Insurance operations | 74 | 83 | -10 | -11 | 373 | 382 | -------------------------------------------------------------------------------- | Investment operations | 17 | -2 | 19 | | 82 | 64 | -------------------------------------------------------------------------------- | Other items | -11 | -11 | 0 | 3 | -44 | -44 | -------------------------------------------------------------------------------- | Total | 79 | 70 | 9 | 13 | 411 | 402 | -------------------------------------------------------------------------------- | Other operating income | 11 | 11 | -1 | -5 | 49 | 50 | -------------------------------------------------------------------------------- | Total income | 215 | 179 | 35 | 20 | 930 | 895 | -------------------------------------------------------------------------------- | Personnel costs | 47 | 45 | 2 | 5 | 192 | 190 | -------------------------------------------------------------------------------- | IT expenses | 19 | 19 | 0 | 2 | 76 | 75 | -------------------------------------------------------------------------------- | Depreciation and | 18 | 17 | 1 | 6 | 73 | 72 | | amortisation | | | | | | | -------------------------------------------------------------------------------- | Other expenses | 39 | 41 | -2 | -5 | 161 | 164 | -------------------------------------------------------------------------------- | Total expenses | 123 | 122 | 1 | 1 | 502 | 501 | -------------------------------------------------------------------------------- | Earnings before | 92 | 57 | 34 | 59 | 428 | 394 | | impairments of | | | | | | | | receivables | | | | | | | -------------------------------------------------------------------------------- | Impairments of | 33 | 21 | 12 | 57 | 141 | 129 | | receivables | | | | | | | -------------------------------------------------------------------------------- | Earnings before tax | 59 | 36 | 22 | 61 | 288 | 265 | -------------------------------------------------------------------------------- | Change in fair value | 61 | 4 | 56 | | 299 | 243 | | reserve | | | | | | | -------------------------------------------------------------------------------- | Earnings before tax at | 119 | 41 | 78 | 190 | 586 | 508 | | fair value | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial performance by quarter | 2009 | 2010 | -------------------------------------------------------------------------------- | € million | Q1 | Q2 | Q3 | Q4 | Q1 | -------------------------------------------------------------------------------- | Net interest income | | | | | | -------------------------------------------------------------------------------- | Corporate Banking | 32 | 33 | 36 | 37 | 40 | -------------------------------------------------------------------------------- | Markets | 10 | 12 | 2 | 4 | 6 | -------------------------------------------------------------------------------- | Other operations | 10 | 22 | 21 | 23 | 14 | -------------------------------------------------------------------------------- | Total | 52 | 67 | 58 | 63 | 60 | -------------------------------------------------------------------------------- | Net commissions and fees | 30 | 36 | 36 | 41 | 40 | -------------------------------------------------------------------------------- | Net trading income | 25 | 8 | 27 | 11 | 7 | -------------------------------------------------------------------------------- | Net investment income | -9 | 0 | 1 | -5 | 18 | -------------------------------------------------------------------------------- | Net income from Non-life | | | | | | | Insurance | | | | | | -------------------------------------------------------------------------------- | Insurance operations | 83 | 101 | 107 | 92 | 74 | -------------------------------------------------------------------------------- | Investment operations | -2 | 32 | 19 | 15 | 17 | -------------------------------------------------------------------------------- | Other items | -11 | -11 | -11 | -11 | -11 | -------------------------------------------------------------------------------- | Total | 70 | 122 | 114 | 96 | 79 | -------------------------------------------------------------------------------- | Other operating income | 11 | 11 | 11 | 17 | 11 | -------------------------------------------------------------------------------- | Total income | 179 | 245 | 247 | 224 | 215 | -------------------------------------------------------------------------------- | Personnel costs | 45 | 50 | 47 | 48 | 47 | -------------------------------------------------------------------------------- | IT expenses | 19 | 18 | 19 | 20 | 19 | -------------------------------------------------------------------------------- | Depreciation and amortisation | 17 | 17 | 17 | 21 | 18 | -------------------------------------------------------------------------------- | Other expenses | 41 | 40 | 36 | 45 | 39 | -------------------------------------------------------------------------------- | Total expenses | 122 | 125 | 119 | 135 | 123 | -------------------------------------------------------------------------------- | Earnings before impairments of | 57 | 119 | 128 | 89 | 92 | | receivables | | | | | | -------------------------------------------------------------------------------- | Impairments of receivables | 21 | 33 | 41 | 34 | 33 | -------------------------------------------------------------------------------- | Earnings before tax | 36 | 87 | 87 | 55 | 59 | -------------------------------------------------------------------------------- | Change in fair value reserve | 4 | 100 | 109 | 30 | 61 | -------------------------------------------------------------------------------- | Earnings before tax at fair | 41 | 186 | 196 | 84 | 119 | | value | | | | | | -------------------------------------------------------------------------------- January-March earnings Earnings before tax came to EUR 59 million (36), showing a year-on-year improvement of EUR 22 million. Earnings before impairment charges on receivables totalled EUR 92 million (57), or EUR 34 million higher than a year ago. Impairments of receivables rose by EUR 12 million year on year to EUR 33 million (21). Earnings before tax at fair value amounted to EUR 119 million (41). Total income increased by 20% to EUR 215 million (179) and expenses by 1% to EUR 123 million (122). Net interest income came to EUR 60 million (52), up by 16% year on year. A rise in the average margin on corporate loans contributed to higher net interest income from Corporate Banking. Net commissions and fees amounted to EUR 40 million, or EUR 10 million and 32% higher than a year ago, asset management, securities issuance and brokerage showing a considerable increase in commissions and fees. Net trading income fell to EUR 7 million (25). With markets getting back to normal, income from trading decreased from the exceptionally high level a year ago. Net investment income totalled EUR 18 million (-9), the figure including capital gains of EUR 19 million recognised on the notes and bonds within the liquidity portfolio. Impairment charges on equities and adjustments for real property acquisition costs reduced net investment income a year ago. Net income from Non-life Insurance rose by EUR 9 million to EUR 79 million (70), as a result of growth in net investment income. Expenses rose by 1% to EUR 123 million (122). Personnel costs increased by EUR 2 million. The number of Group employees increased by 33 from 31 December 2009. The fair value reserve before tax grew by EUR 61 million (4) and impairments recognised from the fair value reserve in the income statement totalled EUR 20 million. On 31 March, the fair value reserve after tax stood at EUR 45 million, as against EUR 0 million on 31 December 2009. Group risk exposure The Group's risk exposure remained favourable. Impairment charges in the first quarter were at the same level as in the previous quarter. Investment-grade exposures remained high. Creditworthiness among corporate customers did not undergo any major changes and, despite their slight growth, doubtful receivables remained low relative to the loan and guarantee portfolio. The financial and liquidity position remained strong. Both short-term and long-term funding performed well. Pohjola strengthened its financial position by issuing two senior bonds with a maturity of three and five years and each worth EUR 750 million. Pohjola Bank plc maintains OP-Pohjola Group's liquidity portfolio which mainly consists of notes and bonds eligible as collateral for central bank refinancing. The liquidity portfolio totalled EUR 12.0 billion (11.7) on 31 March 2010. This liquidity portfolio plus other items included in OP-Pohjola Group's balance sheet and eligible for central bank refinancing constitute the total liquidity buffer, which can be used to cover OP-Pohjola Group's wholesale funding maturities for some 24 months. Determining the value of the available-for-sale financial assets at fair value through profit or loss and included in the liquidity portfolio is based on mark-to-market valuations. Pohjola did not recognise any impairment charges on the liquidity portfolio during the first quarter. Pohjola kept market risks moderate during the period. Net loan losses and impairment losses recognised for the reporting period reduced earnings by EUR 33 million (21), accounting for 0.24% (0.15) of the loan and guarantee portfolio. Final loan losses recognised for the period totalled EUR 25 million (1) and impairment charges EUR 41 million (22). Loan loss recoveries and allowances for impairments totalled EUR 32 million (2). The majority of the impairments were those recognised on an individual basis. Doubtful receivables increased by EUR 27 million to EUR 71 million in the first quarter, accounting for 0.51% (0.32) of the loan and guarantee portfolio. Past due payments came to EUR 15 million (70), representing 0.11% (0.51) of the loan and guarantee portfolio. Despite the slight economic recovery, some of our corporate customers still face a challenging operating environment. The greatest uncertainty related to the Group's risk exposure is associated with future impairment charges on the loan portfolio. Capital adequacy The capital adequacy ratio improved, standing at 13.6% (13.5) as against the statutory minimum requirement of 8%. Tier 1 ratio was 12.1% (11.8). Pohjola Group's Tier 1 target ratio stands at a minimum 9.5% over the economic cycle. Tier 1 capital came to EUR 1,575 million (1,541) and the total capital base amounted to EUR 1,780 million (1,753). Hybrid capital accounted for EUR 274 million of Tier 1 capital. The minimum regulatory capital requirement to cover credit risk amounted to EUR 938 million (957), that to cover market risk EUR 46 million (36) and that to cover operational risks EUR 61 million (49). On 31 March 2010, risk-weighted assets totalled EUR 13,059 million, as against EUR 13,024 million on 31 December 2009. Pohjola Group belongs to OP-Pohjola Group whose capital adequacy is supervised in accordance with the Act on the Supervision of Financial and Insurance Conglomerates. Pohjola Group's capital adequacy ratio under the Act, measured using the consolidation method, stood at 1.77 (1.73). Accordingly, the capital base totalled EUR 2,158 million (2,103) and the minimum capital requirement EUR 1,221 million (1,213), i.e. the total capital base exceeded the minimum regulatory requirement by EUR 937 million (890). As a result of the financial crisis, the regulatory framework for banks' capital requirements is becoming more rigorous in an effort to improve the quality of their capital base and reduce the cyclic nature of capital requirements and set quantitative limits to liquidity risk. These changes are only in their preparation stage, planned to be effective in 2012, and it is too early to predict precisely what their effects will be. The Committee of European Banking Supervisors carried out an impact analysis in all the member states concerning the overall effects of the proposed changes. The changes, if implemented, may present major challenges to the sector and slow down economic growth. As part of OP-Pohjola Group, Pohjola Group was involved in presenting comments on the draft directive and the impact analysis. However, Pohjola Group's and OP-Pohjola Group's strong capital base and liquidity position provide a solid protection against even major legislative amendments. Credit ratings Pohjola Bank plc's credit ratings remained unchanged, as follows: -------------------------------------------------------------------------------- | Rating agency | Short-term debt | Long-term debt | -------------------------------------------------------------------------------- | Standard & Poor's | A-1+ | AA- | -------------------------------------------------------------------------------- | Moody's | P-1 | Aa2 | -------------------------------------------------------------------------------- | Fitch | F1+ | AA- | -------------------------------------------------------------------------------- Pohjola's credit rating outlook issued by Standard & Poor's is stable. Fitch Rating has issued a negative outlook for the long-term debt ratings of Pohjola and Moody's Investor Service has affirmed negative outlook on Pohjola's credit rating. The main reason for the negative outlook is the rapid deterioration of the Finnish economy and its potential effects on Pohjola and OP-Pohjola Group mainly operating in Finland. Financial targets and actuals -------------------------------------------------------------------------------- | Financial targets | Q1/2010 | Q1/2009 | 2009 | Target | -------------------------------------------------------------------------------- | Group | | | | | -------------------------------------------------------------------------------- | Return on equity, % | 15.9 | 7.2 | 19.2 | 13 | -------------------------------------------------------------------------------- | Tier 1 ratio, % | 12.1 | 9.4 | 11.8 | >9.5 | -------------------------------------------------------------------------------- | Banking | | | | | -------------------------------------------------------------------------------- | Operating cost/income ratio, % | 35 | 34 | 35 | <40 | -------------------------------------------------------------------------------- | Non-life Insurance | | | | | -------------------------------------------------------------------------------- | Operating combined ratio, % | 95.5 | 91.3 | 87.7 | 92 | -------------------------------------------------------------------------------- | Operating expense ratio, % | 21.8 | 21.8 | 22.2 | <20 | -------------------------------------------------------------------------------- | Solvency ratio, % | 91 | 67 | 88 | 70 | -------------------------------------------------------------------------------- | Asset Management | | | | | -------------------------------------------------------------------------------- | Operating cost/income ratio, % | 54 | 68 | 53 | <50 | -------------------------------------------------------------------------------- | Rating | | | | | -------------------------------------------------------------------------------- | AA rating affirmed by at least | 3 | 3 | 3 | ≥ 2 | | two credit rating agencies | | | | | -------------------------------------------------------------------------------- | Dividend policy | | | | | -------------------------------------------------------------------------------- | Dividend payout ratio a minimum | | | 51 | >50 | | of 50%, provided that Tier 1 a | | | | | | minimum of 9.5%. | | | | | -------------------------------------------------------------------------------- The financial targets are set over the economic cycle. Performance by business line Banking - Earnings before tax amounted to EUR 26 million (50), affected by EUR 33 million (12) in impairment charges on receivables. - Earnings before impairments of receivables came to EUR 59 million (61). - Net interest income from Corporate Banking was up by 26% year on year. The loan and guarantee portfolio increased by 2% from the level on 31 December 2009 and the average margin on corporate loans rose by 0.06 percentage points to 1.39% from the level on the same date. - The Markets division's financial performance remained good although it weakened from the exceptionally good level posted a year ago. - Operating cost/income ratio stood at 35% (34). Banking: financial results and key figures and ratios -------------------------------------------------------------------------------- | Financial results, € | Q1/201 | Q1/200 | Change | Change, % | 2009 | | million | 0 | 9 | | | | -------------------------------------------------------------------------------- | Net interest income | | | | | | -------------------------------------------------------------------------------- | Corporate Banking | 40 | 32 | 8 | 26 | 138 | -------------------------------------------------------------------------------- | Markets | 6 | 10 | -4 | -42 | 27 | -------------------------------------------------------------------------------- | Total | 46 | 42 | 4 | 10 | 165 | -------------------------------------------------------------------------------- | Net commissions and fees | 24 | 19 | 5 | 26 | 85 | -------------------------------------------------------------------------------- | Net trading income | 13 | 24 | -11 | -47 | 78 | -------------------------------------------------------------------------------- | Other income | 7 | 8 | 0 | -6 | 30 | -------------------------------------------------------------------------------- | Total income | 90 | 93 | -2 | -3 | 358 | -------------------------------------------------------------------------------- | Expenses | | | | | | -------------------------------------------------------------------------------- | Personnel costs | 12 | 12 | 0 | -1 | 50 | -------------------------------------------------------------------------------- | IT expenses | 6 | 5 | 0 | 5 | 21 | -------------------------------------------------------------------------------- | Depreciation and | 7 | 7 | 0 | 4 | 28 | | amortisation | | | | | | -------------------------------------------------------------------------------- | Other expenses | 6 | 7 | 0 | -4 | 25 | -------------------------------------------------------------------------------- | Total expenses | 31 | 31 | 0 | 1 | 125 | -------------------------------------------------------------------------------- | Earnings before | 59 | 61 | -3 | -4 | 234 | | impairments of | | | | | | | receivables | | | | | | -------------------------------------------------------------------------------- | Impairments of | 33 | 12 | 21 | 185 | 117 | | receivables | | | | | | -------------------------------------------------------------------------------- | Earnings before tax | 26 | 50 | -24 | -48 | 117 | -------------------------------------------------------------------------------- | Earnings before tax at | 26 | 50 | -24 | -49 | 120 | | fair value | | | | | | -------------------------------------------------------------------------------- | Loan and guarantee | 13.5 | 14.0 | -0.4 | -3 | 13.3 | | portfolio, € billion | | | | | | -------------------------------------------------------------------------------- | Margin on corporate loan | 1.39 | 1.03 | 0.36 | 35 | 1.33 | | portfolio, % | | | | | | -------------------------------------------------------------------------------- | Ratio of doubtful | | | | | | | receivables to | | | | | | -------------------------------------------------------------------------------- | loan and guarantee | 0.52 | 0.34 | 0.18 | 53 | 0.32 | | portfolio, % | | | | | | -------------------------------------------------------------------------------- | Ratio of impairments of | | | | | | | receivables | | | | | | -------------------------------------------------------------------------------- | to loan and guarantee | 0.24 | 0.08 | 0.16 | 200 | 0.88 | | portfolio, % | | | | | | -------------------------------------------------------------------------------- | Operating cost/income | | | | | | -------------------------------------------------------------------------------- | ratio, % | 35 | 34 | 1 | 3 | 35 | -------------------------------------------------------------------------------- | Personnel | 630 | 626 | 4 | 1 | 607 | -------------------------------------------------------------------------------- January-March earnings Banking posted earnings before tax of EUR 26 million (50), with impairment charges on receivables burdening earnings by EUR 33 million. As a result of the economic recession, capital spending among corporate customers was tepid, which slowed down demand for loans. The loan portfolio grew by EUR 0.2 billion from its year-end level, or by 2%, to EUR 10.9 billion. Committed standby credit facilities increased by EUR 0.9 billion to EUR 3 billion. The guarantee portfolio remained at the year-end level, EUR 2.6 billion, but shrank by EUR 0.2 billion year on year. Despite fiercer competition in the market, the average corporate loan portfolio margin rose by 6 basis points from the year-start level. Net interest income from Corporate Banking rose by 26%, thanks to a rise in the average margin, although the loan portfolio saw a slight decrease year on year. Net commissions and fees were one quarter higher than a year ago. Commission income from loans dropped by one million euros while that from guarantees increased by the same amount. Net commissions from securities issuance rose by EUR 3 million and those from securities brokerage by almost EUR 2 million. The Markets division's earnings performance normalised from its exceptionally high level a year ago. The division's combined net interest income and net trading income fell by 44% to EUR 19 million year on year. The cost/income ratio remained good, standing at 35%. Total expenses were on a par with those in the previous year. Risk exposure by Banking Within Banking, key risks are associated with credit risk arising from customer business, and market risks. During January-March, total exposure increased by EUR 0.4 billion to EUR 21.4 billion. The ratio of investment-grade exposure - that is, ratings 1-5 - to total exposure, excluding households, remained at a healthy level, standing at 66% (64). The share of ratings 11-12 was 2.0% (1.6) and that of non-rated exposure 0.8% (0.8). Corporate exposure (including housing corporations) accounted for 76% (78) of total exposure within Banking. Of corporate exposure, the share of investment-grade exposure stood at 59% (57) and the exposure of the lowest two rating categories amounted to EUR 418 million (321), accounting for 2.6% (2.0) of the total corporate exposure. Significant customer exposure totalled EUR 3.2 billion (2.9). The distribution of corporate exposure by industry remained highly diversified and none of the industries represented over 12% of corporate exposure on 31 March 2010. The most significant industries included Letting and Operation of Dwellings representing 12.0% (11.2), Manufacture of Machinery and Equipment 9.8% (9.7) and Trade 9.5% (10.9). Net loan losses and impairment charges within Banking came to EUR 33 million (12), accounting for 0.24% (0.15) of the loan and guarantee portfolio. On 31 March 2010, Baltic Banking exposures totalled EUR 82 million, accounting for less than 1% of the loan and guarantee portfolio. The Baltic Banking net loan losses and impairment charges for the reporting period amounted to EUR 0.6 million, comprising mainly impairments on receivables assessed on a collective basis. Interest rate risk exposure averaged EUR 1.3 million (6.7), based on the 1-percentage-point change in the interest rate. Non-life Insurance - Earnings before tax amounted to EUR 6 million (-1). Earnings before tax at fair value improved to EUR 75 million (1). - The balance on technical account remained on a sound basis although the bad winter weather conditions increased the number of losses reported by policyholders. The operating combined ratio stood at 95.5% (91.3). - Insurance premium revenue declined by 1% as a result of lower premium revenue shown by statutory workers' compensation insurance. Growth in insurance premium revenue remained vigorous within Private Customers. - The number of losses reported by policyholders within motor liability and motor vehicle insurance increased by 35% due to bad winter conditions. - Return on investments at fair value was 3.2% (-0.4). Non-life Insurance: financial results and key figures and ratios -------------------------------------------------------------------------------- | Financial results, € | Q1/201 | Q1/2009 | Change | Change, % | 2009 | | million | 0 | | | | | -------------------------------------------------------------------------------- | Insurance premium revenue | 227 | 231 | -3 | -1 | 943 | -------------------------------------------------------------------------------- | Claims incurred | -168 | -160 | -7 | 5 | -617 | -------------------------------------------------------------------------------- | Operating expenses | -50 | -50 | 1 | -1 | -210 | -------------------------------------------------------------------------------- | Amortisation adjustment | -6 | -6 | 0 | -2 | -28 | | of intangible assets | | | | | | -------------------------------------------------------------------------------- | Balance on technical | 4 | 14 | -10 | -70 | 88 | | account | | | | | | -------------------------------------------------------------------------------- | Net investment income | 16 | -2 | 18 | | 61 | -------------------------------------------------------------------------------- | Other income and expenses | -14 | -14 | -1 | 6 | -46 | -------------------------------------------------------------------------------- | Earnings/loss before tax | 6 | -1 | 7 | | 102 | -------------------------------------------------------------------------------- | Earnings before tax at | 75 | 1 | 74 | | 291 | | fair value | | | | | | -------------------------------------------------------------------------------- | Operating combined ratio, | 95.5 | 91.3 | | | 87.7 | | % | | | | | | -------------------------------------------------------------------------------- | Operating expense ratio, | 21.8 | 21.8 | | | 22.2 | | % | | | | | | -------------------------------------------------------------------------------- | Return on investments at | 3.2 | -0.4 | | | 10.7 | | fair value, % | | | | | | -------------------------------------------------------------------------------- | Solvency ratio , % | 91 | 67 | | | 88 | -------------------------------------------------------------------------------- | Personnel | 2,087 | 2,057 | 30 | | 2,070 | -------------------------------------------------------------------------------- January-March earnings Earnings before tax amounted to EUR 6 million (-1). Earnings before tax at fair value improved by EUR 75 million. Profitability remained good. The recession continued to affect the corporate sector considerably, reducing insurance premiums paid by corporate customers. The past winter's weather led to bad road conditions, which significantly increased the number of losses reported by policyholder within motor liability and motor vehicle insurance. The balance on technical account before amortisation on intangible assets stood at EUR 10 million (20). Favourable developments in the capital market were reflected in investment performance. Net investment income amounted to EUR 16 million (-2) and net investment income at fair value reached EUR 85 million (-1). The number of loyal customer non-life insurance households totalled 433,394 on 31 March, 55% of whom also use OP-Pohjola Group member banks as their main bank. OP-Pohjola Group member banks' and Helsinki OP Bank's customers can use their OP bonuses earned through banking transactions to pay Pohjola non-life insurance premiums. During January-March, OP bonuses were used to pay over 264,000 insurance premiums, with 47,000 paid in full using bonuses. Insurance premiums paid using bonuses totalled EUR 13 million. In 2005, Pohjola set a target of achieving annual revenue synergies of EUR 17 million by the end of 2010, resulting from growth in the number of loyal customer households, which Pohjola already achieved in March. Insurance business First-quarter profitability was in line with expectations. The operating combined ratio, excluding amortisation on intangible assets arising from the corporate acquisition, stood at 95.5% (91.3%). Profitability a year ago was exceptionally good, considering that it tends to be weaker in the first quarter than in the other quarters. The recession continued to affect the corporate sector considerably, reducing insurance premiums based on companies' payroll bills, net sales and operating profit, with the result that insurance premiums were down within Corporate Customers and the Baltic States. However, growth remained vigorous within Private Customers. Insurance premium revenue totalled EUR 227 million (231). Within Private Customers, insurance premium revenue rose by 9% to EUR 107 million (98). The number of loyal customer households grew by 8,680 (5,925) during the reporting period. OP-Pohjola Group member banks continued to strengthen their role as the largest sales channel for policies among private customers, as evidenced by an increase of 11% in their insurance policy sales. OP-Pohjola Group member banks already account for more than one-third of policies sold to private customers and the majority of new loyal customer households come through them. Within Corporate Customers, insurance premium revenue decreased by 8% to EUR 109 million (118), due mainly to statutory workers' compensation insurance premiums which dropped by EUR 7 million, or by 16%. Pohjola reduced the level of premiums for 2010 within statutory workers' compensation insurance. As a result of the recession, payroll bills which determine insurance premiums continued their downward trend. This fall was intensified by the fact that the impact of the recession on premium revenue was not felt until the following quarters. In the Baltic States, insurance premium revenue decreased by 17% to EUR 12 million (15). The economic recession has strongly affected the insurance market in the Baltic region with the result that the total market in the region shrank by over one quarter during the reporting period. Claims incurred rose due to growth in the private customer insurance portfolio and losses reported by policyholders within motor liability and motor vehicle insurance. The number of such reported losses increased by 35% due to unusually bad winter weather conditions in Southern Finland. Claims incurred increased to EUR 168 million (160), or by 5%. The loss ratio deteriorated to 73.7% (69.5) and the risk ratio (excl. loss adjustment expenses) stood at 66.4% (62.7). The reported number of major or medium-sized losses (in excess of EUR 0.1 million and over EUR 0.5 million in pension liabilities) came to 51 (50) in January-March, with their claims incurred retained for own account totalling EUR 26 million (22). Operating expenses remained at the previous year's level, coming to EUR 50 million (50). The expense ratio was 21.8% (21.8). The cost ratio (incl. loss adjustment expenses) stood at 29.1% (28.7). The operating balance on technical account within Private Customers decreased to EUR 5 million (9) due to higher claims incurred resulting from motor liability and motor vehicle insurance claims. Similarly, the operating balance on technical account within Corporate Customers fell to EUR 5 million (10) due mainly to lower insurance premium revenue from statutory workers' compensation insurance. The balance on technical account recorded by the Baltic States stood at EUR 0.2 million (1). Investment Return on investments at fair value stood at 3.2% (-0.4). Net investment income recognised in the income statement amounted to EUR 16 million (-2) and net investment income at fair value reached EUR 85 million. Impairment charges recognised from the fair value reserve in the income statement totalled EUR 16 million. On 31 March 2010, the investment portfolio totalled EUR 3,002 million (2,851), bonds and bond funds accounting for 73% (76) and listed equities for 11% (10). Unlisted equity investments plus the aforementioned equities represented a total of 16% (13). The fixed-income portfolio by credit rating remained healthy, considering that investments under the "investment-grade" represented 91% (94) and 74% of the investments were rated at least A-. The average residual maturity of the fixed-income portfolio was 5.1 years and the duration 3.6 years (3.4). The Non-life Insurance fixed-income portfolio had a total of EUR 57 million in Greek government notes and bonds. Risk exposure by Non-life Insurance Major risks within Non-life Insurance include underwriting risks associated with claims developments and market risks associated with investment portfolios covering technical provisions. Non-life Insurance solvency capital increased as a result of good investment performance, standing at EUR 852 million (827) on 31 March. The ratio of solvency capital to insurance premium revenue (solvency ratio) was 91% (88). Equalisation provisions decreased to EUR 411 million (417). Pohjola Insurance Ltd's credit rating has remained unchanged: A2 by Moody's and A+ by Standard & Poor's. Equity risks rose due to changes in allocation and favourable market developments in equity investments. Pohjola maintained its interest-rate exposure lower than the long-term target. Asset Management - Earnings before tax improved to EUR 6 million (2) as a result of growth in assets under management. - Assets under management increased by 6% to EUR 34.9 billion (33.1) from their end-2009 level. - Operating cost/income ratio improved to 54% (68). -------------------------------------------------------------------------------- | Financial results, € | Q1/201 | Q1/2009 | Change | Change, % | 2009 | | million | 0 | | | | | -------------------------------------------------------------------------------- | Net commissions and | 13 | 9 | 5 | 53 | 50 | | fees | | | | | | -------------------------------------------------------------------------------- | Other income | 1 | 1 | 0 | -23 | 2 | -------------------------------------------------------------------------------- | Total income | 14 | 9 | 4 | 46 | 52 | -------------------------------------------------------------------------------- | Personnel costs | 5 | 4 | 1 | 20 | 17 | -------------------------------------------------------------------------------- | Other expenses | 3 | 3 | 0 | 7 | 13 | -------------------------------------------------------------------------------- | Total expenses | 8 | 7 | 1 | 15 | 30 | -------------------------------------------------------------------------------- | Earnings before tax | 6 | 2 | 3 | 145 | 21 | -------------------------------------------------------------------------------- | Earnings before tax at | 6 | 2 | 3 | 145 | 21 | | fair value | | | | | | -------------------------------------------------------------------------------- | Assets under | 34.9 | 24.9 | 10.0 | 40 | 33.1 | | management, € billion | | | | | | -------------------------------------------------------------------------------- | Operating cost/income | | | | | | -------------------------------------------------------------------------------- | ratio, % | 54 | 68 | -14 | -21 | 53 | -------------------------------------------------------------------------------- | Personnel | 170 | 156 | 14 | 9 | 162 | -------------------------------------------------------------------------------- January-March earnings before tax increased by 145% to EUR 6 million (2) year on year and the operating cost/income ratio stood at 54% (68). Year on year, assets under management increased by 40%, standing at EUR 34.9 billion (33.1) at the end of the reporting period. A good net assets inflow and favourable market developments during the first quarter contributed to this increase, with clients showing particular interest in emerging market bonds. Of the assets under management, institutional clients accounted for EUR 20.2 billion (19.2), OP mutual funds for EUR 12.0 billion (11.4) and Pohjola Private for EUR 2.8 billion (2.5). Of the assets under management, money-market investments represented 10% (11), bonds 40% (42), equities 29% (27) and other investments 21% (20). Group Functions - Earnings before tax amounted to EUR 22 million (-14). Capital gains on notes and bonds contributed to this improvement. - Impairment charges on receivables and investments decreased. - Liquidity and the availability of funding remained good. - Long-term funding increased by EUR 1.5 billion. Group Functions: financial results and key figures and ratios -------------------------------------------------------------------------------- | Financial results, € | Q1/201 | Q1/2009 | Change | Change, % | 2009 | | million | 0 | | | | | -------------------------------------------------------------------------------- | Net interest income | 14 | 9 | 5 | 60 | 75 | -------------------------------------------------------------------------------- | Net trading income | -6 | 1 | -6 | | -7 | -------------------------------------------------------------------------------- | Net investment income | 18 | -9 | 27 | | -13 | -------------------------------------------------------------------------------- | Other income | 4 | 3 | 0 | 10 | 17 | -------------------------------------------------------------------------------- | Total income | 30 | 4 | 26 | | 72 | -------------------------------------------------------------------------------- | Personnel costs | 3 | 3 | 0 | 15 | 13 | -------------------------------------------------------------------------------- | Other expenses | 5 | 6 | -1 | | 23 | -------------------------------------------------------------------------------- | Total expenses | 8 | 9 | -1 | -8 | 36 | -------------------------------------------------------------------------------- | Earnings/loss before | 22 | -5 | 27 | | 36 | | impairments of | | | | | | | receivables | | | | | | -------------------------------------------------------------------------------- | Impairments of | | 9 | -9 | -100 | 12 | | receivables | | | | | | -------------------------------------------------------------------------------- | Earnings/loss before tax | 22 | -14 | 36 | | 25 | -------------------------------------------------------------------------------- | Earnings/loss before tax | 14 | -12 | 26 | | 76 | | at fair value | | | | | | -------------------------------------------------------------------------------- | Liquidity portfolio, € | 12.0 | 8.8 | 3.1 | 36 | 11.7 | | billion | | | | | | -------------------------------------------------------------------------------- | Receivables and | 0.6 | -0.1 | 0.8 | | -0.2 | | liabilities from/to | | | | | | | OP-Pohjola Group | | | | | | | entities, net position, | | | | | | | € billion | | | | | | -------------------------------------------------------------------------------- | Personnel | 121 | 131 | -10 | -8 | 136 | -------------------------------------------------------------------------------- January-March earnings Earnings before tax were EUR 22 million, as against a loss of EUR 14 million reported a year ago. Successful investment operations within the liquidity portfolio contributed to improved net interest income. Net investment income includes EUR 19 million in capital gains on notes and bonds. Impairments recognised on shares and participations included in available-for-sale financial assets totalled EUR 3 million (4), while a year ago impairments recognised on bonds totalled EUR 9 million. Liquidity and the availability of funding remained good. Debt instruments issued to the public remained at the previous year's level. During the reporting period, Pohjola issued two senior bonds in international capital markets with a maturity of three and five years and each worth EUR 750 million Costs of new funding are higher than those of matured long-term debt. Pohjola Bank plc's net receivables from OP-Pohjola Group retails banks and entities increased to EUR 607 million. The Q1/2009 showed a negative net position of EUR 176 million. Risk exposure by Group Functions Major risks within the Group Functions include those associated with the fair value change of assets included in the liquidity portfolio, and liquidity risks. The Group Functions exposure totalled EUR 19.5 billion (18.3), consisting of assets in the liquidity portfolio and receivables from OP-Pohjola Group member banks. Almost all of the exposure was based on investment-grade counterparties. The Group Functions maintains the liquidity portfolio in order to secure OP-Pohjola Group's liquidity. The liquidity portfolio amounted to EUR 12.0 billion (11.7), comprising primarily investments in notes and bonds issued by governments, municipalities, financial institutions and companies all showing good credit ratings, and in securitised assets. The liquidity portfolio had a total of EUR 21 million in Greek government notes and bonds. Interest rate risk exposure averaged EUR 9.6 million (12.8) in the first quarter, based on the 1-percentage-point change in the interest rate. Decisions by the Annual General Meeting Pohjola Bank plc's Annual General Meeting (AGM) of 26 March 2010 adopted the Financial Statements for 2009, discharged members of the Board of Directors and the President and CEO from liability and decided to distribute a dividend of EUR 0.34 per Series A share and EUR 0.31 per Series K share. The AGM confirmed the number of members of the Board of Directors at eight and approved the proposal by the Board of Directors for the alteration of the Articles of Association and for a Board share issue authorisation. Board of Directors The AGM elected the following members to the Board of Directors until the closing of the next AGM: Merja Auvinen, Managing Director; Jukka Hienonen, President and CEO; Simo Kauppi, Managing Director; Satu Lähteenmäki, Director of the Turku School of Economics; Harri Sailas, President and CEO; and Tom von Weymarn. Mr Sailas is a new Board member. In addition to the abovementioned Board members, Reijo Karhinen, Chairman of the Executive Board of OP-Pohjola Group Central Cooperative, the parent institution, acts as the Chairman of the Board of Directors and Tony Vepsäläinen, President of OP-Pohjola Group Central Cooperative and Vice Chairman of the Executive Board of OP-Pohjola Group Central Cooperative, as Vice Chairman, in accordance with the Articles of Association. At its organising meeting on 26 March 2010 held after the AGM, the Board of Directors of Pohjola Bank plc elected members to the Board's committees and assessed the status of its members' independence of the Company and its major shareholders. Members of the Remuneration Committee: Reijo Karhinen, Executive Chairman (Chairman); Tony Vepsäläinen, President (Vice Chairman); and Satu Lähteenmäki, Director of the Turku School of Economics. Members of the Risk Management Committee: Tony Vepsäläinen, President (Chairman); Simo Kauppi, Managing Director (Vice Chairman); and Harri Sailas, President and CEO. Members of the Audit Committee: Tom von Weymarn (Chairman); Merja Auvinen, Managing Director (Vice Chairman); and Jukka Hienonen, President and CEO. In accordance with the Articles of Association, Reijo Karhinen, Executive Chairman of OP-Pohjola Group and Chairman of the Executive Board of OP-Pohjola Group Central Cooperative, acts as the Chairman of Pohjola's Board of Directors and Tony Vepsäläinen, President of OP-Pohjola Group Central Cooperative and Vice Chairman of the Executive Board of OP-Pohjola Group Central Cooperative, acts as the Vice Chairman. The Board of Directors assessed the independence of its members and concluded that Jukka Hienonen, Satu Lähteenmäki and Tom von Weymarn are non-executive members independent of the Company and its major shareholders. Shares and shareholders On 31 March 2010, the number of Pohjola Bank plc shares totalled 319,551,415 and votes conferred by the shares 593,178,315. On the same date, the number of Series A shares listed on NASDAQ OMX Helsinki Ltd totalled 251,144,690, representing 78.6% of all Pohjola shares and 42.3% of all votes. The number of unlisted Series K shares totalled 68,406,725. On 31 March 2010, one Series A share closed at EUR 8.32, as against EUR 7.55 at the end of 2009. Pohjola paid a dividend of EUR 0.34 for each Series A share and EUR 0.31 for each Series K share for 2009. In January-March, the share price reached a high of EUR 8.94 (17 March 2010) and a low of EUR 7.14 (5 February 2010). During the reporting period, share trading increased in terms of both value and volume. The share trading value amounted to EUR 336,793,725, as against EUR 291,098,003 the year before, and volume to 42.3 shares (40.7). On 31 March, Pohjola Bank plc had 36,609 shareholders, down by 391 from the beginning of the year, private individuals accounting for 95% of all shareholders. The largest shareholder was OP-Pohjola Group Central Cooperative, representing 29.98% of all shares and 57.04% of all votes. The proportion of nominee registered shares of Series A shares rose slightly from 31 December 2009 (15.6%), accounting for 16.5% on 31 March 2010. Group restructuring On 1 March 2010, Pohjola Bank plc sold its Seesam non-life insurers to its subsidiary Pohjola Insurance Ltd in order to streamline the corporate structure. This had no effect on the Group's financial results. Outlook towards the year end The economic recovery underway should gradually be reflected in demand for corporate loans and enable subtle growth in the corporate loan portfolio, with demand for corporate financing focusing on working capital and the refinancing of existing loans. It is estimated that the rise in the average margin on the corporate loan portfolio will slow down and the margin on new loans will take a turn downwards. Given that the business environment is still challenging for companies, it is estimated that impairment charges will remain higher than usual. Enabled by the economic recovery, impairment charges are, however, expected to remain lower than a year ago. The greatest uncertainties related to Banking's financial performance in 2010 are associated with impairment charges on the loan portfolio. Insurance premium revenue is expected to continue to increase at an above-the-market-average rate among private customers. The downward trend in insurance premium revenue from corporate customers is expected to slow down during the rest of the year. In Non-life Insurance, the operating combined ratio is estimated to vary between 89% and 94% in 2010 if the number of large claims is not much higher than in 2009. Expected long-term returns on investment within Non-life Insurance stand at 5.4%. Returns will largely depend on developments in the investment environment. The most significant uncertainties related to Non-life Insurance's financial performance in 2010 pertain to the investment environment and the effect of large claims on claims expenditure. Within Asset Management, the upward trend in assets under management is expected to continue, their amounts being affected by market developments and the net inflow of assets. The greatest uncertainties related to Asset Management's financial performance in 2010 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' result include net interest income arising from assets in the liquidity portfolio and any impairment charges recognised on notes and bonds in the income statement. Consolidated earnings before tax in 2010 are expected to be at the same level as in 2009. When it comes to the outlook for 2010, the greatest uncertainty is related to developments in impairment charges, large claims and the investment environment. There is still great uncertainty about future economic development and the overall operating environment, and these factors are beyond the Group management's control. 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. FINANCIAL STATEMENTS AND NOTES -------------------------------------------------------------------------------- | Consolidated income statement | -------------------------------------------------------------------------------- | Consolidated statement of comprehensive income | -------------------------------------------------------------------------------- | Consolidated balance sheet | -------------------------------------------------------------------------------- | Consolidated statement of changes in equity | -------------------------------------------------------------------------------- | Capital base and capital adequacy | -------------------------------------------------------------------------------- | Capital adequacy under the Act on the Supervision of Financial and Insurance | | Conglomerates | -------------------------------------------------------------------------------- | Consolidated cash flow statement | -------------------------------------------------------------------------------- | Segment information | -------------------------------------------------------------------------------- | Formulae for key figures and ratios | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Notes: | -------------------------------------------------------------------------------- | Note 1. Accounting policies | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Notes to the income statement and balance sheet: | -------------------------------------------------------------------------------- | Note 2. Net interest income | -------------------------------------------------------------------------------- | Note 3. Impairments of receivables | -------------------------------------------------------------------------------- | Note 4. Net income from Non-life Insurance | -------------------------------------------------------------------------------- | Note 5. Net commissions and fees | -------------------------------------------------------------------------------- | Note 6. Net trading income | -------------------------------------------------------------------------------- | Note 7. Net investment income | -------------------------------------------------------------------------------- | Note 8. Other operating income | -------------------------------------------------------------------------------- | Note 9. Classification of financial instruments | -------------------------------------------------------------------------------- | Note 10. Non-life Insurance assets | -------------------------------------------------------------------------------- | Note 11. Intangible assets | -------------------------------------------------------------------------------- | Note 12. Non-life Insurance liabilities | -------------------------------------------------------------------------------- | Note 13. Debt securities issued to the public | -------------------------------------------------------------------------------- | Note 14. Fair value reserve after income tax | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Notes to risk management: | -------------------------------------------------------------------------------- | Note 15. Risk exposure by Banking | -------------------------------------------------------------------------------- | Note 16. Risk exposure by Non-life Insurance | -------------------------------------------------------------------------------- | Note 17. Risk exposure by Group Functions | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other notes: | -------------------------------------------------------------------------------- | Note 18. Collateral given | -------------------------------------------------------------------------------- | Note 19. Off-balance-sheet commitments | -------------------------------------------------------------------------------- | Note 20. Derivative contracts | -------------------------------------------------------------------------------- | Note 21. Other contingent liabilities and commitments | -------------------------------------------------------------------------------- | Note 22. Related-party transactions | -------------------------------------------------------------------------------- Consolidated income statement -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net interest income (Note 2) | 60 | 52 | -------------------------------------------------------------------------------- | Impairments of receivables (Note 3) | 33 | 21 | -------------------------------------------------------------------------------- | Net interest income after impairments | 27 | 31 | -------------------------------------------------------------------------------- | Net income from Non-life Insurance (Note 4) | 79 | 70 | -------------------------------------------------------------------------------- | Net commissions and fees (Note 5) | 40 | 30 | -------------------------------------------------------------------------------- | Net trading income (Note 6) | 7 | 25 | -------------------------------------------------------------------------------- | Net investment income (Note 7) | 18 | -9 | -------------------------------------------------------------------------------- | Other operating income (Note 8) | 11 | 11 | -------------------------------------------------------------------------------- | Total income | 182 | 158 | -------------------------------------------------------------------------------- | Personnel costs | 47 | 45 | -------------------------------------------------------------------------------- | IT expenses | 19 | 19 | -------------------------------------------------------------------------------- | Depreciation/amortisation | 18 | 17 | -------------------------------------------------------------------------------- | Other expenses | 39 | 41 | -------------------------------------------------------------------------------- | Total expenses | 123 | 122 | -------------------------------------------------------------------------------- | Share of associates' profits/losses | 0 | 0 | -------------------------------------------------------------------------------- | Earnings before tax | 59 | 36 | -------------------------------------------------------------------------------- | Income tax expense | 15 | 11 | -------------------------------------------------------------------------------- | Profit for the period | 43 | 25 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to owners of the Parent | 43 | 25 | -------------------------------------------------------------------------------- | Attributable to minority interest | | 0 | -------------------------------------------------------------------------------- | Total | 43 | 25 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS), basic, EUR | | | -------------------------------------------------------------------------------- | Series A | 0.14 | 0.11 | -------------------------------------------------------------------------------- | Series K | 0.11 | 0.08 | -------------------------------------------------------------------------------- Due to Pohjola Bank plc's rights issue and new shares entered in the Trade Register on 4 May 2009, the per-share ratios have been adjusted retroactively using the share issue ratio. Consolidated statement of comprehensive income -------------------------------------------------------------------------------- | EUR million | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 43 | 25 | -------------------------------------------------------------------------------- | Change in fair value reserve | 61 | 4 | -------------------------------------------------------------------------------- | Translation differences | 0 | 0 | -------------------------------------------------------------------------------- | Income tax on other comprehensive income | 16 | 1 | -------------------------------------------------------------------------------- | Total comprehensive income for the period | 88 | 29 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income attributable to | 88 | 29 | | owners of the Parent | | | -------------------------------------------------------------------------------- | Total comprehensive income attributable to | | 0 | | minority interest | | | -------------------------------------------------------------------------------- | Total | 88 | 29 | -------------------------------------------------------------------------------- Consolidated balance sheet -------------------------------------------------------------------------------- | EUR million | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents | 3,329 | 3,102 | -------------------------------------------------------------------------------- | Receivables from credit institutions | 7,686 | 7,630 | -------------------------------------------------------------------------------- | Financial assets at fair value through profit | | | | or loss | | | -------------------------------------------------------------------------------- | Financial assets held for trading | 1,199 | 1,224 | -------------------------------------------------------------------------------- | Financial assets at fair value through profit | 20 | 55 | | or loss at inception | | | -------------------------------------------------------------------------------- | Derivative contracts | 1,757 | 1,443 | -------------------------------------------------------------------------------- | Receivables from customers | 11,530 | 11,323 | -------------------------------------------------------------------------------- | Non-life Insurance assets (Note 10) | 3,467 | 3,156 | -------------------------------------------------------------------------------- | Investment assets | 6,020 | 5,415 | -------------------------------------------------------------------------------- | Investment in associates | 2 | 2 | -------------------------------------------------------------------------------- | Intangible assets (Note 11) | 951 | 960 | -------------------------------------------------------------------------------- | Property, plant and equipment (PPE) | 111 | 117 | -------------------------------------------------------------------------------- | Other assets | 1,543 | 1,068 | -------------------------------------------------------------------------------- | Tax assets | 18 | 15 | -------------------------------------------------------------------------------- | Total assets | 37,634 | 35,510 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities to credit institutions | 4,873 | 4,984 | -------------------------------------------------------------------------------- | Financial liabilities at fair value through | | | | profit or loss | | | -------------------------------------------------------------------------------- | Financial assets held for trading | 90 | 71 | -------------------------------------------------------------------------------- | Derivative contracts | 1,745 | 1,456 | -------------------------------------------------------------------------------- | Liabilities to customers | 5,243 | 4,133 | -------------------------------------------------------------------------------- | Non-life Insurance liabilities (Note 12) | 2,656 | 2,279 | -------------------------------------------------------------------------------- | Debt securities issued to the public (Note 13) | 17,005 | 17,295 | -------------------------------------------------------------------------------- | Provisions and other liabilities | 2,007 | 1,291 | -------------------------------------------------------------------------------- | Tax liabilities | 454 | 434 | -------------------------------------------------------------------------------- | Subordinated liabilities | 1,313 | 1,300 | -------------------------------------------------------------------------------- | Total liabilities | 35,385 | 33,244 | -------------------------------------------------------------------------------- | Shareholders' equity | | | -------------------------------------------------------------------------------- | Capital and reserves attributable to owners of | | | | the Parent | | | -------------------------------------------------------------------------------- | Share capital | 428 | 428 | -------------------------------------------------------------------------------- | Fair value reserve (Note 14) | 45 | 0 | -------------------------------------------------------------------------------- | Other reserves | 1,093 | 1,093 | -------------------------------------------------------------------------------- | Retained earnings | 683 | 746 | -------------------------------------------------------------------------------- | Minority interest | | | -------------------------------------------------------------------------------- | Total shareholders' equity | 2,249 | 2,267 | -------------------------------------------------------------------------------- | Total liabilities and shareholders' equity | 37,634 | 35,510 | -------------------------------------------------------------------------------- Consolidated statement of changes in equity -------------------------------------------------------------------------------- | EUR million | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Attributable to owners of Pohjola Group | -------------------------------------------------------------------------------- | | Share | Fair | Other | Retained | | | capital | value | reserves | earnings | | | | reserve | | | -------------------------------------------------------------------------------- | | Total | | | equity | -------------------------------------------------------------------------------- | Balance at 1 January | 428 | -180 | 795 | 597 | 1,640 | | 2009 | | | | | | -------------------------------------------------------------------------------- | Profit distribution | | | | -45 | -45 | -------------------------------------------------------------------------------- | EUR 0.23 per Series A | | | | -37 | -37 | | share* | | | | | | -------------------------------------------------------------------------------- | EUR 0.20 per Series K | | | | -9 | -9 | | share* | | | | | | -------------------------------------------------------------------------------- | Total comprehensive | | 3 | | 25 | 29 | | income for the period | | | | | | -------------------------------------------------------------------------------- | Equity-settled | | | | 0 | 0 | | share-based | | | | | | | transactions | | | | | | -------------------------------------------------------------------------------- | Other | | | | 0 | 0 | -------------------------------------------------------------------------------- | Balance at 31 March | 428 | -177 | 795 | 577 | 1,624 | | 2009 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Attributable to owners of Pohjola Group | -------------------------------------------------------------------------------- | | Share | Fair | Other | Retained | | | capital | value | reserves | earnings | | | | reserve | | | -------------------------------------------------------------------------------- | | Total | | | equity | -------------------------------------------------------------------------------- | Balance at 1 January | 428 | 0 | 1,093 | 746 | 2,267 | | 2010 | | | | | | -------------------------------------------------------------------------------- | Profit distribution | | | | -107 | -107 | -------------------------------------------------------------------------------- | EUR 0.34 per Series A | | | | -85 | -85 | | share | | | | | | -------------------------------------------------------------------------------- | EUR 0.31 per Series K | | | | -21 | -21 | | share | | | | | | -------------------------------------------------------------------------------- | Total comprehensive | | 45 | | 43 | 88 | | income for the period | | | | | | -------------------------------------------------------------------------------- | Equity-settled | | | | 0 | 0 | | share-based | | | | | | | transactions | | | | | | -------------------------------------------------------------------------------- | Other | | | | 0 | 0 | -------------------------------------------------------------------------------- | Balance at 31 March | 428 | 45 | 1,093 | 683 | 2,249 | | 2010 | | | | | | -------------------------------------------------------------------------------- *Due to Pohjola Bank plc's rights issue and new shares entered in the Trade Register on 4 May 2009, the number of shares has been adjusted in such a way that the adjusted dividend per share is as follows: 2009: EUR 0.19 per Series A share and EUR 0.16 per Series K share. Capital base and capital adequacy -------------------------------------------------------------------------------- | EUR million | 31 | 31 Dec | | | March | 2009 | | | 2010 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital base | | | -------------------------------------------------------------------------------- | Equity capital | 2,249 | 2,267 | -------------------------------------------------------------------------------- | Elimination of insurance companies' effect in | 53 | 92 | | equity capital (equity capital and Group | | | | eliminations) | | | -------------------------------------------------------------------------------- | Minority interest | | 0 | -------------------------------------------------------------------------------- | Hybrid capital | 274 | 274 | -------------------------------------------------------------------------------- | Intangible assets | -145 | -145 | -------------------------------------------------------------------------------- | Fair value reserve, excess funding of pension | -43 | -49 | | liability and change in fair value of | | | | investment property | | | -------------------------------------------------------------------------------- | Dividend distribution proposed by Board of | | -107 | | Directors | | | -------------------------------------------------------------------------------- | Planned dividend distribution | -22 | | -------------------------------------------------------------------------------- | Insurance company investments 50% | -703 | -715 | -------------------------------------------------------------------------------- | Impairments - expected losses 50% | -87 | -76 | -------------------------------------------------------------------------------- | Tier 1 capital | 1,575 | 1,541 | -------------------------------------------------------------------------------- | Fair value reserve | 12 | 18 | -------------------------------------------------------------------------------- | Subordinated liabilities included in upper | 299 | 299 | | Tier 2 | | | -------------------------------------------------------------------------------- | Subordinated liabilities included in lower | 685 | 687 | | Tier 2 | | | -------------------------------------------------------------------------------- | Insurance company investments 50% | -703 | -715 | -------------------------------------------------------------------------------- | Impairments - expected losses 50% | -87 | -76 | -------------------------------------------------------------------------------- | Tier 2 capital | 206 | 212 | -------------------------------------------------------------------------------- | Total capital base | 1,780 | 1,753 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Risk-weighted assets, excl. transitional rules | 13,059 | 13,024 | -------------------------------------------------------------------------------- | Risk-weighted assets according to transitional | 13,059 | 13,024 | | rules | | | -------------------------------------------------------------------------------- | Ratios, excl. transitional rules: | | | -------------------------------------------------------------------------------- | Capital adequacy ratio, % | 13.6 | 13.5 | -------------------------------------------------------------------------------- | Tier 1 ratio, % | 12.1 | 11.8 | -------------------------------------------------------------------------------- | Ratios according to transitional rules: | | | -------------------------------------------------------------------------------- | Capital adequacy ratio, % | 13.6 | 13.5 | -------------------------------------------------------------------------------- | Tier 1 ratio, % | 12.1 | 11.8 | -------------------------------------------------------------------------------- Capital base and capital adequacy measurement is based on approaches under Basel II. Pohjola has used the Internal Ratings Based Approach for corporate exposures. Capital adequacy under the Act on the Supervision of Financial and Insurance Conglomerates -------------------------------------------------------------------------------- | EUR | | | | 31 | 31 | | million | | | | March | Dec | | | | | | 20 | 2009 | | | | | | 10 | | -------------------------------------------------------------------------------- | Pohjola Group's equity capital | | 2,249 | 2,267 | -------------------------------------------------------------------------------- | Business-segment-specific items | | 1,307 | 1,309 | -------------------------------------------------------------------------------- | Goodwill and intangible assets | | -861 | -869 | -------------------------------------------------------------------------------- | Equalisation | | | -304 | -309 | | provision | | | | | -------------------------------------------------------------------------------- | Other items included in equity capital and | -232 | -296 | | business-segment-specific items, but not included in | | | | the conglomerate's capital resources | | | -------------------------------------------------------------------------------- | Conglomerate's capital base, | | 2,158 | 2,103 | | total | | | | -------------------------------------------------------------------------------- | Regulatory capital requirement for credit institutions | 1,045 | 1,042 | -------------------------------------------------------------------------------- | Regulatory capital requirement for insurance | 177 | 171 | | operations | | | -------------------------------------------------------------------------------- | Total minimum amount of conglomerate's capital base | 1,221 | 1,213 | -------------------------------------------------------------------------------- | Conglomerate's capital adequacy | | 937 | 890 | -------------------------------------------------------------------------------- | Conglomerate's capital adequacy ratio (capital | 1.77 | 1.73 | | resources/minimum of capital resources) | | | -------------------------------------------------------------------------------- OP-Pohjola Group's capital adequacy ratio under the Act on Credit Institutions stood at 12.6% and Tier 1 ratio at 12.6%. OP-Pohjola Group's capital adequacy ratio calculated using the consolidation method, under the Act on the Supervision of Financial and Insurance Conglomerates, was 1.62. Consolidated cash flow statement -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from operating activities | | | -------------------------------------------------------------------------------- | Profit for the period | 43 | 25 | -------------------------------------------------------------------------------- | Adjustments to profit for the period | 281 | 323 | -------------------------------------------------------------------------------- | Increase (-) or decrease (+) in operating | -1,603 | -1,044 | | assets | | | -------------------------------------------------------------------------------- | Receivables from credit institutions | 23 | -48 | -------------------------------------------------------------------------------- | Financial assets at fair value through profit | 44 | 1,119 | | or loss | | | -------------------------------------------------------------------------------- | Derivative contracts | -17 | -7 | -------------------------------------------------------------------------------- | Receivables from customers | -253 | 206 | -------------------------------------------------------------------------------- | Non-life Insurance assets | -277 | -394 | -------------------------------------------------------------------------------- | Investment assets | -673 | -1,760 | -------------------------------------------------------------------------------- | Other assets | -449 | -160 | -------------------------------------------------------------------------------- | Increase (+) or decrease (-) in operating | 1,921 | 139 | | liabilities | | | -------------------------------------------------------------------------------- | Liabilities to credit institutions | -111 | -514 | -------------------------------------------------------------------------------- | Financial liabilities at fair value through | 19 | 59 | | profit or loss | | | -------------------------------------------------------------------------------- | Derivative contracts | 15 | 10 | -------------------------------------------------------------------------------- | Liabilities to customers | 1,109 | 43 | -------------------------------------------------------------------------------- | Non-life Insurance liabilities | 190 | 244 | -------------------------------------------------------------------------------- | Provisions and other liabilities | 699 | 297 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income tax paid | -3 | -13 | -------------------------------------------------------------------------------- | Dividends received | 19 | 5 | -------------------------------------------------------------------------------- | A. Net cash from operating activities | 659 | -565 | -------------------------------------------------------------------------------- | Cash flow from investing activities | | | -------------------------------------------------------------------------------- | Decreases in held-to-maturity financial assets | 64 | 22 | -------------------------------------------------------------------------------- | Acquisition of subsidiaries and associates, net | 0 | 0 | | of cash acquired | | | -------------------------------------------------------------------------------- | Purchase of PPE and intangible assets | -3 | -6 | -------------------------------------------------------------------------------- | Proceeds from sale of PPE and intangible assets | 0 | 0 | -------------------------------------------------------------------------------- | B. Net cash used in investing activities | 60 | 16 | -------------------------------------------------------------------------------- | Cash flow from financing activities | | | -------------------------------------------------------------------------------- | Increases in subordinated liabilities | 23 | 132 | -------------------------------------------------------------------------------- | Decreases in subordinated liabilities | -10 | -122 | -------------------------------------------------------------------------------- | Increases in debt securities issued to the | 12,173 | 11,756 | | public | | | -------------------------------------------------------------------------------- | Decreases in debt securities issued to the | -12,494 | -12,523 | | public | | | -------------------------------------------------------------------------------- | Dividends paid | -107 | -45 | -------------------------------------------------------------------------------- | C. Net cash used in financing activities | -414 | -803 | -------------------------------------------------------------------------------- | Net increase/decrease in cash and cash | 305 | -1,352 | | equivalents (A+B+C) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents at period-start | 3,250 | 2,435 | -------------------------------------------------------------------------------- | Cash and cash equivalents at period-end | 3,555 | 1,084 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Interest received | 391 | 674 | -------------------------------------------------------------------------------- | Interest paid | -256 | -597 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Adjustments to profit for the period | | | -------------------------------------------------------------------------------- | Non-cash transactions | | | -------------------------------------------------------------------------------- | Impairments of receivables | 34 | 21 | -------------------------------------------------------------------------------- | Unrealised net earnings in Non-life Insurance | 220 | 230 | -------------------------------------------------------------------------------- | Change in fair value for trading | -13 | 16 | -------------------------------------------------------------------------------- | Unrealised net gains on foreign exchange | 21 | 17 | | operations | | | -------------------------------------------------------------------------------- | Change in fair value of investment property | | 2 | -------------------------------------------------------------------------------- | Planned amortisation /depreciation | 18 | 17 | -------------------------------------------------------------------------------- | Share of associates' profits | 0 | 0 | -------------------------------------------------------------------------------- | Other | 1 | 20 | -------------------------------------------------------------------------------- | Total adjustments | 281 | 323 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents | | | -------------------------------------------------------------------------------- | Liquid assets * | 3,332 | 912 | -------------------------------------------------------------------------------- | Receivables from credit institutions payable on | 223 | 171 | | demand | | | -------------------------------------------------------------------------------- | Total | 3,555 | 1,084 | -------------------------------------------------------------------------------- *Of which EUR 3 million (5) consists of Non-life Insurance cash and cash equivalents. Segment information -------------------------------------------------------------------------------- | Q1 earnings | Banking | Non-life | Asset Management | | | | Insurance | | -------------------------------------------------------------------------------- | EUR million | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | -------------------------------------------------------------------------------- | Net interest income | | | | | | | -------------------------------------------------------------------------------- | From Corporate Banking | 40 | 32 | | | | | -------------------------------------------------------------------------------- | From Markets | 6 | 10 | | | | | -------------------------------------------------------------------------------- | From other operations | | | -1 | -1 | 0 | 0 | -------------------------------------------------------------------------------- | Total | 46 | 42 | -1 | -1 | 0 | 0 | -------------------------------------------------------------------------------- | Net commissions and | 24 | 19 | 4 | 4 | 13 | 9 | | fees | | | | | | | -------------------------------------------------------------------------------- | Net trading income | 13 | 24 | | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Net investment income | 0 | | | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Net income from | | | | | | | | Non-life Insurance | | | | | | | -------------------------------------------------------------------------------- | From insurance | | | 74 | 83 | | | | operations | | | | | | | -------------------------------------------------------------------------------- | From investment | | | 16 | -2 | | | | operations | | | | | | | -------------------------------------------------------------------------------- | From other items | | | -11 | -11 | | | -------------------------------------------------------------------------------- | Total | | | 78 | 70 | | | -------------------------------------------------------------------------------- | Other operating income | 7 | 8 | 1 | 1 | 0 | 0 | -------------------------------------------------------------------------------- | Total income | 90 | 93 | 82 | 74 | 14 | 9 | -------------------------------------------------------------------------------- | Personnel costs | 12 | 12 | 27 | 26 | 5 | 4 | -------------------------------------------------------------------------------- | IT expenses | 6 | 5 | 11 | 10 | 1 | 0 | -------------------------------------------------------------------------------- | Amortisation on | | | 8 | 8 | 1 | 1 | | intangible assets | | | | | | | | related to company | | | | | | | | acquisitions | | | | | | | -------------------------------------------------------------------------------- | Other | 7 | 7 | 2 | 1 | 0 | 0 | | depreciation/amortisati | | | | | | | | on and impairments | | | | | | | -------------------------------------------------------------------------------- | Other expenses | 6 | 7 | 29 | 31 | 2 | 2 | -------------------------------------------------------------------------------- | Total expenses | 31 | 31 | 76 | 76 | 8 | 7 | -------------------------------------------------------------------------------- | Earnings/loss before | 59 | 61 | 6 | -1 | 6 | 2 | | impairment of | | | | | | | | receivables | | | | | | | -------------------------------------------------------------------------------- | Impairments of | 33 | 12 | 0 | | | | | receivables | | | | | | | -------------------------------------------------------------------------------- | Earnings before tax | 26 | 50 | 6 | -1 | 6 | 2 | -------------------------------------------------------------------------------- | Change in fair value | 0 | 0 | 69 | 2 | 0 | 0 | | reserve | | | | | | | -------------------------------------------------------------------------------- | Earnings/loss before | 26 | 50 | 75 | 1 | 6 | 2 | | tax at fair value | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Q1 earnings | Group | Eliminations | Group total | | | Functions | | | -------------------------------------------------------------------------------- | EUR million | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | -------------------------------------------------------------------------------- | Net interest income | | | | | | | -------------------------------------------------------------------------------- | From Corporate Banking | | | | | 40 | 32 | -------------------------------------------------------------------------------- | From Markets | | | | | 6 | 10 | -------------------------------------------------------------------------------- | From other operations | 14 | 9 | 0 | 1 | 14 | 10 | -------------------------------------------------------------------------------- | Total | 14 | 9 | 0 | 1 | 60 | 52 | -------------------------------------------------------------------------------- | Net commissions and | 0 | 0 | -1 | -1 | 40 | 30 | | fees | | | | | | | -------------------------------------------------------------------------------- | Net trading income | -6 | 1 | | 0 | 7 | 25 | -------------------------------------------------------------------------------- | Net investment income | 18 | -9 | | | 18 | -9 | -------------------------------------------------------------------------------- | Net income from | | | | | | | | Non-life Insurance | | | | | | | -------------------------------------------------------------------------------- | From insurance | | | | 0 | 74 | 83 | | operations | | | | | | | -------------------------------------------------------------------------------- | From investment | | 0 | 1 | 0 | 17 | -2 | | operations | | | | | | | -------------------------------------------------------------------------------- | From other items | | | | | -11 | -11 | -------------------------------------------------------------------------------- | Total | | 0 | 1 | 0 | 79 | 70 | -------------------------------------------------------------------------------- | Other operating income | 4 | 4 | -1 | -1 | 11 | 11 | -------------------------------------------------------------------------------- | Total income | 30 | 4 | -1 | -1 | 215 | 179 | -------------------------------------------------------------------------------- | Personnel costs | 3 | 3 | 0 | | 47 | 45 | -------------------------------------------------------------------------------- | IT expenses | 2 | 3 | | 0 | 19 | 19 | -------------------------------------------------------------------------------- | Amortisation on | | | | | 8 | 8 | | intangible assets | | | | | | | | related to company | | | | | | | | acquisitions | | | | | | | -------------------------------------------------------------------------------- | Other | 0 | 0 | | | 9 | 8 | | depreciation/amortisati | | | | | | | | on and impairments | | | | | | | -------------------------------------------------------------------------------- | Other expenses | 3 | 3 | -1 | -1 | 39 | 41 | -------------------------------------------------------------------------------- | Total expenses | 8 | 9 | -1 | -1 | 123 | 122 | -------------------------------------------------------------------------------- | Earnings/loss before | 22 | -5 | 0 | 0 | 92 | 57 | | impairment of | | | | | | | | receivables | | | | | | | -------------------------------------------------------------------------------- | Impairments of | | 9 | | | 33 | 21 | | receivables | | | | | | | -------------------------------------------------------------------------------- | Earnings before tax | 22 | -14 | 0 | 0 | 59 | 36 | -------------------------------------------------------------------------------- | Change in fair value | -8 | 2 | -1 | | 61 | 4 | | reserve | | | | | | | -------------------------------------------------------------------------------- | Earnings/loss before | 14 | -12 | -1 | | 119 | 41 | | tax at fair value | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Balance sheet | Banking | Non-life | Asset Management | | | | Insurance | | -------------------------------------------------------------------------------- | EUR million | 31 | 31 Dec | 31 | 31 Dec | 31 | 31 Dec | | | March | 2009 | March | 2009 | March | 2009 | | | 2010 | | 2010 | | 2 | | | | | | | | 010 | | -------------------------------------------------------------------------------- | Receivables from | 11,114 | 10,880 | | | 0 | | | customers | | | | | | | -------------------------------------------------------------------------------- | Receivables from | 195 | 278 | | | 5 | 5 | | credit institutions | | | | | | | -------------------------------------------------------------------------------- | Financial assets at | 871 | 932 | | | | | | fair value through | | | | | | | | profit or loss | | | | | | | -------------------------------------------------------------------------------- | Non-life Insurance | | | 3,629 | 3,202 | | | | assets | | | | | | | -------------------------------------------------------------------------------- | Investment assets | 33 | 18 | 16 | 0 | 14 | 17 | -------------------------------------------------------------------------------- | Investments in | | | 2 | 2 | | | | associates | | | | | | | -------------------------------------------------------------------------------- | Other assets | 2,726 | 2,012 | 818 | 829 | 122 | 131 | -------------------------------------------------------------------------------- | Total assets | 14,938 | 14,119 | 4,466 | 4,033 | 140 | 153 | -------------------------------------------------------------------------------- | Liabilities to | 1,385 | 1,263 | | | | | | customers | | | | | | | -------------------------------------------------------------------------------- | Liabilities to | 791 | 747 | | | | | | credit institutions | | | | | | | -------------------------------------------------------------------------------- | Non-life Insurance | | | 2,656 | 2,279 | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Debt securities | | | | | | | | issued to the | | | | | | | | public | | | | | | | -------------------------------------------------------------------------------- | Subordinated | | | 50 | 50 | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Other liabilities | 2,830 | 1,872 | 137 | 108 | 14 | 15 | -------------------------------------------------------------------------------- | Total liabilities | 5,007 | 3,882 | 2,843 | 2,437 | 14 | 15 | -------------------------------------------------------------------------------- | Shareholders' | | | | | | | | equity | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Average personnel | 630 | 626 | 2,087 | 2,057 | 170 | 156 | -------------------------------------------------------------------------------- | Capital | 2 | 7 | 2 | 9 | 0 | 1 | | expenditure, EUR | | | | | | | | million | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Balance sheet | Group Functions | Eliminations | Group total | -------------------------------------------------------------------------------- | EUR million | 31 | 31 Dec | 31 | 31 Dec | 31 | 31 Dec | | | March | 2009 | March | 2009 | March | 2009 | | | 2010 | | 2010 | | 2 | | | | | | | | 010 | | -------------------------------------------------------------------------------- | Receivables from | 492 | 527 | -76 | -84 | 11,530 | 11,323 | | customers | | | | | | | -------------------------------------------------------------------------------- | Receivables from | 10,834 | 10,468 | -19 | -20 | 11,015 | 10,732 | | credit institutions | | | | | | | -------------------------------------------------------------------------------- | Financial assets at | 348 | 347 | | | 1,219 | 1,279 | | fair value through | | | | | | | | profit or loss | | | | | | | -------------------------------------------------------------------------------- | Non-life Insurance | | | -162 | -47 | 3,467 | 3,156 | | assets | | | | | | | -------------------------------------------------------------------------------- | Investment assets | 5,961 | 5,387 | -4 | -6 | 6,020 | 5,415 | -------------------------------------------------------------------------------- | Investments in | | | | | 2 | 2 | | associates | | | | | | | -------------------------------------------------------------------------------- | Other assets | 747 | 691 | -32 | -58 | 4,381 | 3,604 | -------------------------------------------------------------------------------- | Total assets | 18,382 | 17,421 | -292 | -215 | 37,634 | 35,510 | -------------------------------------------------------------------------------- | Liabilities to | 3,899 | 2,915 | -41 | -45 | 5,243 | 4,133 | | customers | | | | | | | -------------------------------------------------------------------------------- | Liabilities to | 4,157 | 4,320 | -76 | -84 | 4,873 | 4,984 | | credit institutions | | | | | | | -------------------------------------------------------------------------------- | Non-life Insurance | | | | | 2,656 | 2,279 | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Debt securities | 17,125 | 17,323 | -121 | -28 | 17,005 | 17,295 | | issued to the | | | | | | | | public | | | | | | | -------------------------------------------------------------------------------- | Subordinated | 1,263 | 1,250 | | | 1,313 | 1,300 | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Other liabilities | 1,369 | 1,318 | -55 | -59 | 4,296 | 3,253 | -------------------------------------------------------------------------------- | Total liabilities | 27,813 | 27,126 | -292 | -216 | 35,385 | 33,244 | -------------------------------------------------------------------------------- | Shareholders' | | | | | 2,249 | 2,267 | | equity | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Average personnel | 121 | 131 | | | 3,007 | 2,968 | -------------------------------------------------------------------------------- | Capital | 0 | 1 | | | 4 | 18 | | expenditure, EUR | | | | | | | | million | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Banking | Income | Earnings/loss before | | | | tax | -------------------------------------------------------------------------------- | | Q1/ | Q1/ | Q1/ | Q1/ | | | 2010 | 2009 | 2010 | 2009 | -------------------------------------------------------------------------------- | Corporate Banking | 63 | 52 | 9 | 23 | -------------------------------------------------------------------------------- | Markets | 26 | 40 | 17 | 30 | -------------------------------------------------------------------------------- | Baltic Banking | 1 | 1 | 0 | -3 | -------------------------------------------------------------------------------- | Total | 90 | 93 | 26 | 50 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-life Insurance | Insurance | Balance on technical | | | premium | account | | | revenue | | -------------------------------------------------------------------------------- | | Q1/ | Q1/ | Q1/ | Q1/ | | | 2010 | 2009 | 2010 | 2009 | -------------------------------------------------------------------------------- | Private Customers | 107 | 98 | 5 | 9 | -------------------------------------------------------------------------------- | Corporate Customers | 109 | 118 | 5 | 10 | -------------------------------------------------------------------------------- | Baltic States | 12 | 15 | 0 | 1 | -------------------------------------------------------------------------------- | Amortisation adjustment of | | | -6 | -6 | | intangible assets | | | | | -------------------------------------------------------------------------------- | Total | 227 | 231 | 4 | 14 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group Functions | Q1/ | Q1/ | | | 2010 | 2009 | -------------------------------------------------------------------------------- | Central Banking earnings | 3 | 5 | | before tax, EUR | | | | million | | | -------------------------------------------------------------------------------- | | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- | Receivables from OP-Pohjola Group entities, | 6,764 | 6,314 | | EUR million | | | -------------------------------------------------------------------------------- | Liabilities to OP-Pohjola Group entities, | 3,300 | 3,412 | | EUR million | | | -------------------------------------------------------------------------------- FORMULAS FOR KEY FIGURES AND 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 Earnings/share (EPS) Profit for the period attributable to owners of the Parent / Average share-issue adjusted number of shares during the period Earnings/share (EPS) at fair value (Profit for the period attributable to owners of the Parent + Change in fair value reserve) / Average share-issue adjusted number of shares during the period Equity/share Shareholders' equity / Share-issue adjusted number of shares on the balance sheet date Dividend per share (DPS) Dividends paid for the financial year/ 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 ratio under the Act on the Supervision of Financial and Insurance Conglomerates Conglomerate's total capital / Conglomerate's total minimum capital requirement Capital adequacy ratio, % Total capital / Total minimum capital requirement x 8 Tier 1 ratio, % Total Tier 1 capital / Total minimum capital requirement x 8 KEY RATIOS FOR NON-LIFE INSURANCE The key ratio formulas for Non-life Insurance are based on regulations issued by the Finnish Financial Supervisory Authority, using the corresponding IFRS sections to the extent applicable. The ratios are calculated using expenses by function applied by non-life insurance companies, which are not presented on the same principle as in the Consolidated Income Statement. Loss ratio 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 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 Solvency ratio (+ Non-life Insurance net assets + Subordinated loans + Net tax liability for the period - Deferred tax to be realised in the near future and other items deducted from the solvency margin - Intangible assets)/ Insurance premium revenue x 100 OPERATING KEY RATIOS Operating cost/income ratio (+ Personnel costs + Other administrative expenses + Other operating expenses excl. amortisation 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 loss ratio, % Claims incurred, excl. changes in reserving bases/ Insurance premium revenue, excl. net changes in reserving bases x 100 Operating expense ratio Operating expenses / Net insurance premium revenue x 100 Operating combined ratio, % Loss ratio + Operating expense ratio Values used in calculating the ratios -------------------------------------------------------------------------------- | (€ million) | 2010 | 2009 | | | Q1 | | -------------------------------------------------------------------------------- | Non-life Insurance | | | -------------------------------------------------------------------------------- | Net tax liabilities for the period | -25 | -14 | -------------------------------------------------------------------------------- | Own subordinated loans | 50 | 50 | -------------------------------------------------------------------------------- | Deferred tax to be realised in the near future and | 3 | 6 | | other items deducted from the solvency margin of | | | | the companies | | | -------------------------------------------------------------------------------- | Intangible assets | 792 | 800 | -------------------------------------------------------------------------------- Notes Note 1. Accounting policies The Interim Report for 1 January-31 March 2010 has been prepared in accordance with IAS 34 (Interim Financial Reporting), as approved by the EU. The Financial Statements 2009 contain a description of the accounting policies applied by Pohjola Group. The Interim Report is based on unaudited information. Since all figures in the Report have been rounded off, the sum of single figures may differ from the presented sum total. Summary of presentation of income statement: -------------------------------------------------------------------------------- | Net interest income | Received and paid interest on fixed-income | | | instruments, the recognised difference between | | | the nominal value and acquisition value, | | | interest on interest-rate derivatives and fair | | | value change in fair value hedging | -------------------------------------------------------------------------------- | Net income from Non-life | Premiums written, claims paid, change in | | Insurance | provision for unearned premiums and for unpaid | | | claims, investment income, expenses (interest, | | | dividends, realised capital gains and losses) | | | and impairments | -------------------------------------------------------------------------------- | Net commissions and fees | Commission income and expenses, and the | | | recognition of Day 1 profit related to illiquid | | | derivatives | -------------------------------------------------------------------------------- | Net trading income | Fair value changes in financial instruments at | | | fair value through profit or loss, excluding | | | accrued interest, and capital gains and losses, | | | as well as dividends | -------------------------------------------------------------------------------- | Net investment income | Realised capital gains and losses on | | | available-for-sale financial assets, | | | impairments, dividends as well as fair value | | | changes in investment property, capital gains | | | and losses, rents and other property-related | | | expenses | -------------------------------------------------------------------------------- | Other operating income | Other operating income, central banking service | | | fee | -------------------------------------------------------------------------------- | Personnel costs | Wages and salaries, pension costs, social | | | expenses | -------------------------------------------------------------------------------- | Other administrative | Office expenses, IT costs, other administrative | | expenses | expenses | -------------------------------------------------------------------------------- | Other operating expenses | Depreciation/amortisation, other Non-life | | | Insurance expenses, rents | -------------------------------------------------------------------------------- Notes to the income statement and balance sheet Note 2. Net interest income -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Loans and other receivables | 71 | 173 | -------------------------------------------------------------------------------- | Receivables from credit institutions and | 32 | 70 | | central banks | | | -------------------------------------------------------------------------------- | Notes and bonds | 114 | 71 | -------------------------------------------------------------------------------- | Derivatives held for trading (net) | 18 | -5 | -------------------------------------------------------------------------------- | Liabilities to credit institutions | -13 | -22 | -------------------------------------------------------------------------------- | Liabilities to customers | -2 | -16 | -------------------------------------------------------------------------------- | Debt securities issued to the public | -83 | -151 | -------------------------------------------------------------------------------- | Subordinated debt | -8 | -10 | -------------------------------------------------------------------------------- | Hybrid capital | -2 | -5 | -------------------------------------------------------------------------------- | Financial liabilities held for trading | -1 | -2 | -------------------------------------------------------------------------------- | Other (net) | 0 | 0 | -------------------------------------------------------------------------------- | Net interest income before items under | 127 | 103 | | hedge accounting | | | -------------------------------------------------------------------------------- | Derivatives under hedge accounting (net) | -67 | -52 | -------------------------------------------------------------------------------- | Items under hedge accounting (net) | -67 | -52 | -------------------------------------------------------------------------------- | Total net interest income | 60 | 52 | -------------------------------------------------------------------------------- Note 3. Impairments of receivables -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Receivables eliminated as loan or | 25 | 1 | | guarantee losses | | | -------------------------------------------------------------------------------- | Recoveries from receivables eliminated as | 0 | -1 | | loan or guarantee losses | | | -------------------------------------------------------------------------------- | Increase in impairment provisions | 41 | 22 | -------------------------------------------------------------------------------- | Decrease in impairment provisions | -32 | -2 | -------------------------------------------------------------------------------- | Total impairments of receivables | 33 | 21 | -------------------------------------------------------------------------------- Note 4. Net income from Non-life Insurance -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net insurance premium revenue | | | -------------------------------------------------------------------------------- | Premiums written | 446 | 473 | -------------------------------------------------------------------------------- | Insurance premiums ceded to reinsurers | -28 | -41 | -------------------------------------------------------------------------------- | Change in provision for unearned premiums | -208 | -228 | -------------------------------------------------------------------------------- | Reinsurers' share | 18 | 27 | -------------------------------------------------------------------------------- | Total | 227 | 230 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net Non-life Insurance claims | | | -------------------------------------------------------------------------------- | Claims paid | 177 | 157 | -------------------------------------------------------------------------------- | Insurance claims recovered from reinsurers | -15 | -1 | -------------------------------------------------------------------------------- | Change in provision for unpaid claims | -30 | -4 | -------------------------------------------------------------------------------- | Reinsurers' share | 22 | -4 | -------------------------------------------------------------------------------- | Total | 154 | 147 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net investment income, Non-life Insurance | | | -------------------------------------------------------------------------------- | Interest income | 16 | 19 | -------------------------------------------------------------------------------- | Dividend income | 17 | 3 | -------------------------------------------------------------------------------- | Investment property | 1 | 1 | -------------------------------------------------------------------------------- | Realised fair value gains and losses | | | -------------------------------------------------------------------------------- | Notes and bonds | 31 | -11 | -------------------------------------------------------------------------------- | Shares and participations | -20 | -1 | -------------------------------------------------------------------------------- | Loans and receivables | -1 | | -------------------------------------------------------------------------------- | Investment property | 0 | 0 | -------------------------------------------------------------------------------- | Derivatives | -8 | 10 | -------------------------------------------------------------------------------- | Unrealised fair value gains and losses | | | -------------------------------------------------------------------------------- | Notes and bonds | 0 | -1 | -------------------------------------------------------------------------------- | Shares and participations | -16 | -23 | -------------------------------------------------------------------------------- | Loans and receivables | -1 | | -------------------------------------------------------------------------------- | Investment property | 0 | 1 | -------------------------------------------------------------------------------- | Derivatives | -4 | 0 | -------------------------------------------------------------------------------- | Other | 1 | 0 | -------------------------------------------------------------------------------- | Total | 17 | -2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Unwinding of discount | -11 | -11 | -------------------------------------------------------------------------------- | Other | 0 | 0 | -------------------------------------------------------------------------------- | Total net income from Non-life Insurance | 79 | 70 | -------------------------------------------------------------------------------- Note 5. Net commissions and fees -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commission income | | | -------------------------------------------------------------------------------- | Lending | 8 | 10 | -------------------------------------------------------------------------------- | Payment transfers | 3 | 3 | -------------------------------------------------------------------------------- | Securities brokerage | 7 | 4 | -------------------------------------------------------------------------------- | Securities issuance | 4 | 1 | -------------------------------------------------------------------------------- | Asset management and legal services | 14 | 9 | -------------------------------------------------------------------------------- | Insurance operations | 4 | 4 | -------------------------------------------------------------------------------- | Guarantees | 4 | 3 | -------------------------------------------------------------------------------- | Other | 2 | 1 | -------------------------------------------------------------------------------- | Total commission income | 46 | 36 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commission expenses | | | -------------------------------------------------------------------------------- | Payment transfers | 1 | 1 | -------------------------------------------------------------------------------- | Securities brokerage | 2 | 2 | -------------------------------------------------------------------------------- | Securities issuance | 1 | 1 | -------------------------------------------------------------------------------- | Asset management and legal services | 2 | 2 | -------------------------------------------------------------------------------- | Other | 1 | 1 | -------------------------------------------------------------------------------- | Total commission expenses | 6 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total net commissions and fees | 40 | 30 | -------------------------------------------------------------------------------- Note 6. Net trading income -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial assets and liabilities held for | | | | trading | | | -------------------------------------------------------------------------------- | Realised changes in fair value | | | -------------------------------------------------------------------------------- | Notes and bonds | 4 | 23 | -------------------------------------------------------------------------------- | Shares and participations | 0 | 0 | -------------------------------------------------------------------------------- | Derivatives | -12 | 23 | -------------------------------------------------------------------------------- | Unrealised changes in fair value | | | -------------------------------------------------------------------------------- | Notes and bonds | 4 | -18 | -------------------------------------------------------------------------------- | Shares and participations | 0 | 0 | -------------------------------------------------------------------------------- | Derivatives | 6 | -7 | -------------------------------------------------------------------------------- | Financial assets and liabilities at fair | | | | value through profit or loss | | | -------------------------------------------------------------------------------- | Realised changes in fair value | | | -------------------------------------------------------------------------------- | Notes and bonds | 0 | | -------------------------------------------------------------------------------- | Unrealised changes in fair value | | | -------------------------------------------------------------------------------- | Notes and bonds | 1 | 0 | -------------------------------------------------------------------------------- | Net income from foreign exchange | 3 | 4 | | operations | | | -------------------------------------------------------------------------------- | Total net trading income | 7 | 25 | -------------------------------------------------------------------------------- Note 7. Net investment income -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Available-for-sale financial assets | | | -------------------------------------------------------------------------------- | Capital gains and losses | | | -------------------------------------------------------------------------------- | Notes and bonds | 14 | 0 | -------------------------------------------------------------------------------- | Shares and participations | 0 | -1 | -------------------------------------------------------------------------------- | Dividend income | 3 | 2 | -------------------------------------------------------------------------------- | Impairments | -3 | -3 | -------------------------------------------------------------------------------- | Carried at amortised cost | | | -------------------------------------------------------------------------------- | Capital gains and losses | | | -------------------------------------------------------------------------------- | Loans and other receivables | 4 | | -------------------------------------------------------------------------------- | Total | 18 | -2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investment property | 0 | -7 | -------------------------------------------------------------------------------- | Total net investment income | 18 | -9 | -------------------------------------------------------------------------------- Note 8. Other operating income -------------------------------------------------------------------------------- | EUR million | Q1/ | Q1/ | -------------------------------------------------------------------------------- | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Central banking service fees | 2 | 2 | -------------------------------------------------------------------------------- | Realisation of repossessed items | 0 | 0 | -------------------------------------------------------------------------------- | Rental income from assets rented under | 6 | 6 | | operating lease | | | -------------------------------------------------------------------------------- | Other | 2 | 2 | -------------------------------------------------------------------------------- | Total | 11 | 11 | -------------------------------------------------------------------------------- Note 9. Classification of financial instruments -------------------------------------------------------------------------------- | EUR million | Loans | Held to | At fair | Availabl | Hedging | Total | | | and | maturit | value | e for | derivati | | | | receiva | y | through | sale | ves | | | | bles | | profit | | | | | | | | or | | | | | | | | loss* | | | | -------------------------------------------------------------------------------- | Assets | | | | | | | -------------------------------------------------------------------------------- | Cash and | 3,329 | | | | | 3,329 | | balances with | | | | | | | | central banks | | | | | | | -------------------------------------------------------------------------------- | Receivables | 7,686 | | | | | 7,686 | | from credit | | | | | | | | institutions | | | | | | | | and central | | | | | | | | banks | | | | | | | -------------------------------------------------------------------------------- | Derivative | | | 1,668 | | 89 | 1,757 | | contracts | | | | | | | -------------------------------------------------------------------------------- | Receivables | 11,530 | | | | | 11,530 | | from customers | | | | | | | -------------------------------------------------------------------------------- | Non-life | 883 | | 86 | 2,497 | | 3,467 | | Insurance | | | | | | | | assets** | | | | | | | -------------------------------------------------------------------------------- | Notes and | | 1,024 | 1,219 | 4,889 | | 7,132 | | bonds*** | | | | | | | -------------------------------------------------------------------------------- | Shares and | | | | 87 | | 87 | | participations | | | | | | | -------------------------------------------------------------------------------- | Other | 2,626 | | 20 | | | 2,645 | | receivables | | | | | | | -------------------------------------------------------------------------------- | Total 31 March | 26,054 | 1,024 | 2,993 | 7,474 | 89 | 37,634 | | 2010 | | | | | | | -------------------------------------------------------------------------------- | Total 31 | 24,986 | 1,086 | 2,767 | 6,613 | 59 | 35,510 | | December 2009 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR million | At fair | Other | Hedging | Total | | | value | liabilit | derivati | | | | through | ies | ves | | | | profit | | | | | | or loss | | | | -------------------------------------------------------------------------------- | Liabilities | | | | | -------------------------------------------------------------------------------- | Liabilities to credit institutions | | 4,873 | | 4,873 | -------------------------------------------------------------------------------- | Financial liabilities held for | 90 | | | 90 | | trading (excl. derivatives) | | | | | -------------------------------------------------------------------------------- | Derivative contracts | 1,539 | | 207 | 1,745 | -------------------------------------------------------------------------------- | Liabilities to customers | | 5,243 | | 5,243 | -------------------------------------------------------------------------------- | Non-life Insurance liabilities | 4 | 2,652 | | 2,656 | -------------------------------------------------------------------------------- | Debt instruments issued to the | | 17,005 | | 17,005 | | public | | | | | -------------------------------------------------------------------------------- | Subordinated liabilities | | 1,313 | | 1,313 | -------------------------------------------------------------------------------- | Other liabilities | | 2,461 | | 2,461 | -------------------------------------------------------------------------------- | Total 31 March 2010 | 1,633 | 33,545 | 207 | 35,385 | -------------------------------------------------------------------------------- | Total 31 December 2009 | 1,377 | 31,716 | 150 | 33,244 | -------------------------------------------------------------------------------- *Assets at fair value through profit or loss include financial assets held for trading, financial assets at fair value through profit or loss at inception and investment property. ** Non-life Insurance assets are specified in Note 10. *** On 31 March 2010, notes and bonds included EUR 20 million (55) in notes and bonds recognised using the fair value option. Debt securities issued to the public are carried at amortised cost. On 31 March 2010, the fair value of these debt instruments was EUR 60 million higher than their carrying amount, based on information available in markets and employing commonly used valuation techniques. Subordinated liabilities are carried at amortised cost. Their fair value was EUR 39 million lower than their carrying amount. Note 10. Non-life Insurance assets -------------------------------------------------------------------------------- | EUR million | 31 March | 31 | | | 2010 | Dec | | | | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | | | -------------------------------------------------------------------------------- | Loans and other receivables | 445 | 424 | -------------------------------------------------------------------------------- | Equities | 434 | 387 | -------------------------------------------------------------------------------- | Property | 78 | 78 | -------------------------------------------------------------------------------- | Notes and bonds | 1,360 | 1,392 | -------------------------------------------------------------------------------- | Derivatives | | | 0 | 1 | -------------------------------------------------------------------------------- | Other | 712 | 530 | -------------------------------------------------------------------------------- | Total | 3,028 | 2,811 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other assets | | | -------------------------------------------------------------------------------- | Prepayments and accrued income | 33 | 37 | -------------------------------------------------------------------------------- | Other | | | -------------------------------------------------------------------------------- | From direct insurance | 310 | 214 | -------------------------------------------------------------------------------- | From reinsurance | 92 | 89 | -------------------------------------------------------------------------------- | Cash in hand and at bank | 3 | 4 | -------------------------------------------------------------------------------- | Total | 439 | 345 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total Non-life insurance assets | 3,467 | 3,156 | -------------------------------------------------------------------------------- Note 11. Intangible assets -------------------------------------------------------------------------------- | EUR million | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Goodwill | 516 | 516 | -------------------------------------------------------------------------------- | Brands | 173 | 173 | -------------------------------------------------------------------------------- | Customer relationships | 197 | 203 | -------------------------------------------------------------------------------- | Other | 65 | 68 | -------------------------------------------------------------------------------- | Total | 951 | 960 | -------------------------------------------------------------------------------- Note 12. Non-life Insurance liabilities -------------------------------------------------------------------------------- | EUR | | | | 31 March | 31 | | million | | | | 2010 | Dec | | | | | | | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Provision for unpaid claims | | | | -------------------------------------------------------------------------------- | Provision for unpaid claims for annuities | 1,057 | 1,058 | -------------------------------------------------------------------------------- | Other provision for unpaid | | 708 | 726 | | claims | | | | -------------------------------------------------------------------------------- | Total | | | | 1,765 | 1,784 | -------------------------------------------------------------------------------- | Provision for unearned | | 570 | 361 | | premiums | | | | -------------------------------------------------------------------------------- | Other liabilities | | | 320 | 134 | -------------------------------------------------------------------------------- | Total | 2,656 | 2,279 | -------------------------------------------------------------------------------- Note 13. Debt securities issued to the public -------------------------------------------------------------------------------- | EUR million | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Bonds | 6,999 | 6,549 | -------------------------------------------------------------------------------- | Certificates of deposit, commercial papers | 9,769 | 10,519 | | and ECPs | | | -------------------------------------------------------------------------------- | Other | 237 | 227 | -------------------------------------------------------------------------------- | Total | 17,005 | 17,295 | -------------------------------------------------------------------------------- Note 14. Fair value reserve after income tax -------------------------------------------------------------------------------- | EUR million | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Loans and other receivables | | | -------------------------------------------------------------------------------- | Reclassified notes and bonds | -14 | -17 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | | | -------------------------------------------------------------------------------- | Notes and bonds | 35 | 53 | -------------------------------------------------------------------------------- | Equities and mutual funds with equity risk | 23 | -35 | -------------------------------------------------------------------------------- | Other funds | 1 | 0 | -------------------------------------------------------------------------------- | Total | 45 | 0 | -------------------------------------------------------------------------------- The negative fair value reserve may recover by means of asset appreciation and recognised impairments. Only the value changes in the fair value reserve are recognised which the management deem to fulfil the relevant requirements. The fair value reserve before tax totalled EUR 60 million (-0) and the related deferred tax liability amounted to EUR 15 million (deferred tax asset of 0). On 31 March 2010, positive mark-to-market valuations of equity instruments before tax in the fair value reserve totalled EUR 71 million and negative mark-to-market valuations EUR 39 million. In Q1/2010, impairments recognised from the fair value reserve in the income statement totalled EUR 20 million. Notes to risk management Note 15. Risk exposure by Banking -------------------------------------------------------------------------------- | Total exposure by rating category*, EUR billion | -------------------------------------------------------------------------------- | Rating | 31 March | 31 Dec | Change | | category | 2010 | 2009 | | -------------------------------------------------------------------------------- | 1-2 | 2.5 | 2.2 | 0.3 | -------------------------------------------------------------------------------- | 3-5 | 11.2 | 10.9 | 0.3 | -------------------------------------------------------------------------------- | 6-7 | 4.1 | 4.2 | -0.1 | -------------------------------------------------------------------------------- | 8-9 | 2.2 | 2.4 | -0.2 | -------------------------------------------------------------------------------- | 10 | 0.1 | 0.1 | 0.0 | -------------------------------------------------------------------------------- | 11-12 | 0.4 | 0.3 | 0.1 | -------------------------------------------------------------------------------- | Non-rated | 0.2 | 0.2 | 0.0 | -------------------------------------------------------------------------------- | Total | 20.7 | 20.3 | 0.4 | -------------------------------------------------------------------------------- | *) excl. private customers | -------------------------------------------------------------------------------- Sensitivity analysis of market risk -------------------------------------------------------------------------------- | | | 31 March 2010 | 31 Dec 2009 | -------------------------------------------------------------------------------- | Banking, EUR | Risk | Change | Effect | Effect | Effect | Effect | | million | paramet | | on | on | on | on | | | er | | result | share- | result | share-h | | | | | s | holder | s | olders' | | | | | | s' | | equity | | | | | | equity | | | -------------------------------------------------------------------------------- | Interest-rat | Interes | 1 percentage | 8 | | 5 | | | e risk | t | point | | | | | -------------------------------------------------------------------------------- | Currency | Market | 20 percentage | 1 | | 1 | | | risk | value | points | | | | | -------------------------------------------------------------------------------- | Volatility | | | | | | | | risk | | | | | | | -------------------------------------------------------------------------------- | Interest-rat | Volatil | 20 percentage | 3 | | 4 | | | e volatility | ity | points | | | | | -------------------------------------------------------------------------------- | Currency | Volatil | 10 percentage | 0 | | 0 | | | volatility | ity | points | | | | | -------------------------------------------------------------------------------- | Credit risk | Credit | 0.5 percentage | 14 | | 12 | | | premium *) | spread | points | | | | | -------------------------------------------------------------------------------- Sensitivity figures have been calculated as the sum of the currencies' intrinsic value. *) The credit risk premium has been calculated on notes and bonds at fair value through profit or loss and available for sale, included in liquidity reserves. Note 16. Risk exposure by Non-life Insurance -------------------------------------------------------------------------------- | Risk parameter | | Total | Change in | Effect on | Effect on | | | | amount | risk | combined ratio | share-hol | | | | 31 | parameter | | ders' | | | | March | | | equity, | | | | 2010, | | | EUR | | | | EUR | | | million | | | | million | | | | -------------------------------------------------------------------------------- | Insurance portfolio | 940 | Up 1% | Up 0.9 | 9 | | or insurance premium | | | percentage | | | revenue*) | | | point | | -------------------------------------------------------------------------------- | Claims incurred*) | 625 | Up 1% | Down 0.7 | -6 | | | | | percentage | | | | | | points | | -------------------------------------------------------------------------------- | Major loss of over | | 1 loss | Down 0.5 | -5 | | EUR 5 million | | | percentage | | | | | | points | | -------------------------------------------------------------------------------- | Personnel costs*) | 110 | Up 8% | Down 0.9 | -9 | | | | | percentage | | | | | | point | | -------------------------------------------------------------------------------- | Expenses by | 266 | Up 4% | Down 1.1 | -11 | | function*) **) | | | percentage | | | | | | point | | -------------------------------------------------------------------------------- | Inflation for | 495 | Up 0.25 | Down 0.4 | -3 | | collective liability | | percentage | percentage | | | | | points | points | | -------------------------------------------------------------------------------- | Life expectancy for | 1 333 | Up 1 year | Down 3.3 | -30 | | discounted insurance | | | percentage | | | contract liability | | | points | | -------------------------------------------------------------------------------- | Discount rate for | 1 333 | Down 0.1 | Down 1.7 | -16 | | discounted insurance | | percentage | percentage | | | contract liability | | point | points | | -------------------------------------------------------------------------------- *) Moving 12-month. **) Expenses by function in Non-life Insurance excluding expenses for investment management and expenses for other services rendered. Non-life Insurance investment portfolio by allocation -------------------------------------------------------------------------------- | EUR million | | | | -------------------------------------------------------------------------------- | Portfolio allocation | Fair value | % | Fair value | % | | | 31 March | | 31 Dec | | | | 2010 | | 2009 | | | | 2009 | | | | -------------------------------------------------------------------------------- | Money market | 87 | 3 % | 101 | 4 % | | instruments | | | | | -------------------------------------------------------------------------------- | Bonds and bond funds | 2,117 | 71 % | 2,067 | 72 % | -------------------------------------------------------------------------------- | Equities | 409 | 14 % | 364 | 13 % | -------------------------------------------------------------------------------- | Alternative | 219 | 7 % | 155 | 5 % | | investments | | | | | -------------------------------------------------------------------------------- | Real property | 169 | 6 % | 164 | 6 % | -------------------------------------------------------------------------------- | Total | 3,002 | 100 % | 2,851 | 100 % | -------------------------------------------------------------------------------- Non-life Insurance fixed-income portfolio by maturity and credit rating on 31 March 2010* -------------------------------------------------------------------------------- | EUR million | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Year(s) | 0-1 | 1-3 | 3-5 | 5-7 | 7-10 | 10- | Total | % | -------------------------------------------------------------------------------- | Aaa | 22 | 142 | 86 | 124 | 20 | 111 | 504 | 23 % | -------------------------------------------------------------------------------- | Aa1−Aa3 | 50 | 154 | 118 | 23 | 11 | 44 | 400 | 18 % | -------------------------------------------------------------------------------- | A1−A3 | 71 | 214 | 221 | 83 | 108 | 42 | 738 | 33 % | -------------------------------------------------------------------------------- | Baa1−Ba | 34 | 155 | 101 | 30 | 49 | 13 | 382 | 17 % | | a3 | | | | | | | | | -------------------------------------------------------------------------------- | Ba1 or | 54 | 21 | 69 | 7 | 20 | 0 | 171 | 8 % | | lower | | | | | | | | | -------------------------------------------------------------------------------- | Interna | 7 | 3 | 7 | 2 | 2 | 1 | 21 | 1 % | | lly | | | | | | | | | | rated | | | | | | | | | -------------------------------------------------------------------------------- | Total | 237 | 689 | 602 | 268 | 209 | 212 | 2 217 | 100 % | -------------------------------------------------------------------------------- * Excludes credit derivatives. The Non-life Insurance fixed-income portfolio had a total of EUR 57 million in Greek government notes and bonds. The table below shows the sensitivity of investment risks and their effect on shareholders' equity: -------------------------------------------------------------------------------- | Non-life | Risk parameter | Change | Effect on | | Insurance | | | shareholders' | | | | | equity, EUR million | -------------------------------------------------------------------------------- | | | | 31 | 31 Dec | | | | | March | 2009 | | | | | 201 | | | | | | 0 | | -------------------------------------------------------------------------------- | Bonds and bond | Interest rate | 1 percentage | 84 | 73 | | funds1) | | point | | | -------------------------------------------------------------------------------- | Equities 2) | Market value | 20 percentage | 81 | 73 | | | | points | | | -------------------------------------------------------------------------------- | Venture capital | Market value | 20 percentage | 15 | 14 | | funds and | | points | | | | unquoted | | | | | | equities | | | | | -------------------------------------------------------------------------------- | Commodities | Market value | 20 percentage | 5 | 5 | | | | points | | | -------------------------------------------------------------------------------- | Real property | Market value | 10 percentage | 17 | 16 | | | | points | | | -------------------------------------------------------------------------------- | Currency | Value of | 20 percentage | 57 | 21 | | | currency | points | | | -------------------------------------------------------------------------------- | Credit risk | Credit spread | 0.5 percentage | 43 | 39 | | premium 3) | | points | | | -------------------------------------------------------------------------------- | Derivatives 4) | Volatility | 20 percentage | 0 | 0 | | | | points | | | -------------------------------------------------------------------------------- 1) Include money-market investments, convertible bonds and interest-rate derivatives 2) Include hedge funds and equity derivatives 3) Includes bonds and money-market investments, including government bonds and interest-rate derivatives issued by developed countries 4) 20 percentage points for equity derivatives, 10 percentage points for interest-rate derivatives and 5 percentage points for currency derivatives. Note 17. Risk exposure by Group Function Total exposure by rating category*, EUR billion -------------------------------------------------------------------------------- | Rating category | 31 March | 31 Dec | Change | | | 2010 | 2009 | | -------------------------------------------------------------------------------- | 1-2 | 15.1 | 13.6 | 1.5 | -------------------------------------------------------------------------------- | 3-5 | 4.3 | 4.6 | -0.3 | -------------------------------------------------------------------------------- | 6-7 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | 8-9 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | 10 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | 11-12 | | | | -------------------------------------------------------------------------------- | Non-rated | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Total | 19.5 | 18.3 | 1.2 | -------------------------------------------------------------------------------- Sensitivity analysis of market risk -------------------------------------------------------------------------------- | | | | 31 March 2010 | 31 Dec 2009 | -------------------------------------------------------------------------------- | Group | Risk | Change | Effect | Effect | Effect | Effect | | Functions, | paramet | | on | on | on | on | | EUR million | er | | result | share- | results | share-h | | | | | s | holder | | olders' | | | | | | s' | | equity | | | | | | equity | | | -------------------------------------------------------------------------------- | Interest-rat | Interes | 1 percentage | 8 | 0 | 2 | 3 | | e risk | t rate | point | | | | | -------------------------------------------------------------------------------- | Interest-rat | Volatil | 20 percentage | 0 | | 1 | | | e volatility | ity | points | | | | | -------------------------------------------------------------------------------- | Credit risk | Credit | 0.5 | 0 | 100 | 0 | 68 | | premium *) | spread | percentage | | | | | | | | points | | | | | -------------------------------------------------------------------------------- | Price risk | | | | | | | -------------------------------------------------------------------------------- | Equity | Market | 20 percentage | | 2 | | 2 | | portfolio | value | points | | | | | -------------------------------------------------------------------------------- | Private | Market | 20 percentage | | 6 | | 6 | | equity funds | value | points | | | | | -------------------------------------------------------------------------------- | Property | Market | 10 percentage | 3 | | 3 | | | risk | value | points | | | | | -------------------------------------------------------------------------------- Sensitivity figures have been calculated as the sum of the currencies' intrinsic value. *) The credit risk premium has been calculated on notes and bonds at fair value through profit or loss and available for sale, included in liquidity reserves. Financial assets included in liquidity reserve by maturity and credit rating on 31 March 2010 -------------------------------------------------------------------------------- | EUR | | | | | | | | | | million | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Year | 0-1 | 1-3 | 3-5 | 5-7 | 7-10 | 10- | Total | % | -------------------------------------------------------------------------------- | Aaa | 3,556 | 968 | 1,862 | 742 | 509 | 140 | 7,777 | 65 % | -------------------------------------------------------------------------------- | Aa1−Aa3 | 719 | 1,021 | 703 | 106 | 108 | 105 | 2,763 | 23 % | -------------------------------------------------------------------------------- | A1−A3 | 166 | 526 | 132 | 23 | 8 | 5 | 859 | 7 % | -------------------------------------------------------------------------------- | Baa1−Baa | 2 | 62 | 45 | 10 | | | 120 | 1 % | | 3 | | | | | | | | | -------------------------------------------------------------------------------- | Ba1 or | 34 | 53 | 44 | 25 | 11 | | 166 | 1 % | | lower | | | | | | | | | -------------------------------------------------------------------------------- | Internal | 122 | 110 | 36 | 26 | | | 293 | 2 % | | ly rated | | | | | | | | | -------------------------------------------------------------------------------- | Total | 4,598 | 2,740 | 2,820 | 931 | 636 | 251 | 11,977 | 100 % | -------------------------------------------------------------------------------- The residual maturity of liquidity reserves averages 3.6 years. The liquidity portfolio had a total of EUR 21 million in Greek government notes and bonds. Other notes Note 18. Collateral given -------------------------------------------------------------------------------- | EUR million | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Given on behalf of own liabilities and | | | | commitments | | | -------------------------------------------------------------------------------- | Mortgages | 1 | 1 | -------------------------------------------------------------------------------- | Pledges | 5,959 | 5,839 | -------------------------------------------------------------------------------- | Other | 592 | 600 | -------------------------------------------------------------------------------- | Total collateral given | 6,552 | 6,439 | -------------------------------------------------------------------------------- | Total collateralised liabilities | 1,076 | 1,023 | -------------------------------------------------------------------------------- Note 19. Off-balance-sheet commitments -------------------------------------------------------------------------------- | EUR million | 31 March | 31 Dec | | | 2010 | 2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Guarantees | 1,305 | 1,296 | -------------------------------------------------------------------------------- | Other guarantee liabilities | 1,314 | 1,283 | -------------------------------------------------------------------------------- | Loan commitments | 4,427 | 4,140 | -------------------------------------------------------------------------------- | Commitments related to short-term trade | 91 | 98 | | transactions | | | -------------------------------------------------------------------------------- | Other | 484 | 447 | -------------------------------------------------------------------------------- | Total off-balance-sheet commitments | 7,621 | 7,264 | -------------------------------------------------------------------------------- Note 20. Derivative contracts -------------------------------------------------------------------------------- | 31 March 2010 | Nominal values/residual | Total | Fair values | | | term to maturity | | | -------------------------------------------------------------------------------- | EUR million | <1 year | 1-5 | >5 | | Assets | Liabiliti | | | | years | years | | | es | -------------------------------------------------------------------------------- | Interest rate | 52,550 | 52,527 | 15,976 | 121,054 | 1,478 | 1,555 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Currency | 12,823 | 2,083 | 497 | 15,403 | 294 | 326 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Equity and | 125 | 835 | 23 | 983 | 105 | | | index | | | | | | | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Credit | 30 | 178 | | 208 | 4 | 2 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Other | 3,826 | 284 | | 4,111 | 4 | 18 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Total | 69,355 | 55,907 | 16,496 | 141,759 | 1,885 | 1,901 | | derivatives | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 31 March 2009 | Nominal values/residual | Total | Fair values | | | term to maturity | | | -------------------------------------------------------------------------------- | EUR million | <1 year | 1-5 | >5 | | Assets | Liabiliti | | | | years | years | | | es | -------------------------------------------------------------------------------- | Interest rate | 26,934 | 50,599 | 10,972 | 88,504 | 1,404 | 1,466 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Currency | 12,333 | 1,340 | 876 | 14,549 | 249 | 519 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Equity and | 122 | 606 | 20 | 749 | 23 | 6 | | index | | | | | | | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Credit | 149 | 167 | | 316 | 4 | 19 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Other | 393 | 72 | | 465 | 1 | 2 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Total | 39,931 | 52,783 | 11,868 | 104,583 | 1,682 | 2,012 | | derivatives | | | | | | | -------------------------------------------------------------------------------- Note 21. Other contingent liabilities and commitments On 31 March 2010, Banking commitments to venture capital funds amounted to EUR 15 million and Non-Life Insurance commitments to EUR 112 million. They are included in the section 'Off-balance-sheet commitments'. Note 22. Related-party transactions Pohjola Group's related parties comprise its parent company OP-Pohjola Group Central Cooperative, subsidiaries consolidated into the Group, associates and administrative personnel and other related-party entities. Pohjola Group's administrative personnel comprises Pohjola Bank plc's President and CEO, members of the Board of Directors and their close family members. Related parties also include companies over which a person among administrative personnel or his close family member exercises significant influence. Other related-party entities include OP Pension Fund, OP Pension Foundation and sister companies within OP-Pohjola Group Central Cooperative Consolidated. Normal loan terms and conditions apply to loans granted to related parties. These loans are tied to generally used reference rates. Related-party transactions have not undergone any substantial changes since 31 December 2009. Helsinki, 5 May 2010 Pohjola Bank plc Board of Directors This Interim Report is available at www.pohjola.fi/english > Media. Background information on the Report can also be found at the same address. Meeting for analysts and the media A meeting for analysts will be held in Finnish on 5 May 2010, starting at 10.30 am. A conference call for analysts and investors will be held in English on the same day starting at 3.30 pm (Finnish time) (1.30 pm UK time), tel. +358 (0)20 699121, PIN code 845143#. Mikael Silvennoinen, Pohjola Bank plc's President and CEO, will present the financial results at a press conference in OP-Pohjola Group Central Cooperative (Teollisuuskatu 1 b, Vallila, Helsinki), on 5 May, starting at noon. Financial reporting in 2010 Schedule for Interim Reports in 2010: -------------------------------------------------------------------------------- | Interim Report H1 | 4 August | -------------------------------------------------------------------------------- | Interim Report Q1-3 | 3 November | -------------------------------------------------------------------------------- DISTRIBUTION NASDAQ OMX Helsinki Ltd London Stock 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 Jouko Pölönen, CFO, tel. +358 (0)10 252 3405 Tarja Ollilainen, Senior Vice President, Investor Relations, tel. +358 (0)10 252 4494
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