OP Yrityspankki Oyj - Interim report (Q1 and Q3)

OP Corporate Bank plc's Interim Report for 1 January-30 September 2016

OP Corporate Bank plc
Interim Report for 1 January-30 September 2016
Stock Exchange Release, 2 November 2016 at 9.00 am EET

OP Corporate Bank plc's Interim Report for 1 January-30 September 2016

  * Consolidated earnings before tax were EUR 400 million (514). The return on
    equity was 11.1% (16.4).
  * Banking earnings before tax decreased to EUR 189 million (259) due to lower
    net investment income. The loan portfolio grew in the reporting period by
    6.4% to EUR 17.4 billion (16.4). Earnings included EUR 13 million (19) in
    impairment loss on receivables.
  * Non-life Insurance earnings before tax decreased to EUR 199 million (225)
    due to lower net investment income. Operating combined ratio was 86.5%
    (86.3).
  * Other Operations earnings before tax were EUR 11 million (28). Liquidity and
    access to funding remained good.
  * The CET1 ratio was 14.5% (14.1) as against the target of 15%.
  * Unchanged outlook: OP Corporate Bank Group's consolidated earnings before
    tax are expected to be clearly lower than earnings from continuing
    operations in 2015.

                                  Q1-3/2016 Q1-3/2015 Change, % Q1-4/2015
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 Earnings before tax, EUR million
-------------------------------------------------------------------------
   Banking                              189       259     -27.0       334
-------------------------------------------------------------------------
   Non-life Insurance                   199       225     -11.5       267
-------------------------------------------------------------------------
   Other Operations                      11        28     -60.3        23
-------------------------------------------------------------------------
 Group total                            400       514     -22.2       625
-------------------------------------------------------------------------

Comparatives deriving from the income statement are based on figures reported
for continuing operations for the corresponding period a year ago. Unless
otherwise specified, balance-sheet and other cross-sectional figures on 31
December 2015 are used as comparatives.

 Financial targets*                     Q1-3/2016 Q1-3/2015 Q1-4/2015    Target
-------------------------------------------------------------------------------
 Return on equity, %                         11.1      16.4      14.8        13
-------------------------------------------------------------------------------
 CET1 ratio, %                               14.5      13.7      14.1        15
-------------------------------------------------------------------------------
 Cost/income ratio by Banking, %             34.6      26.7      27.0      < 35
-------------------------------------------------------------------------------
 Operating combined ratio by Non-life
 Insurance, % **                             86.5      86.3      87.3      < 92
-------------------------------------------------------------------------------
 Operating expense ratio by Non-life
 Insurance, %                                17.6      17.4      17.7        18
-------------------------------------------------------------------------------
 Non-life Insurance solvency ratio
 (under Solvency II), %
 including the effect of transitional
 provisions                                   162                 158
-------------------------------------------------------------------------------
 Non-life Insurance solvency ratio
 (under Solvency II), %
 excluding the effect of transitional
 provisions                                   146       152       139       120
-------------------------------------------------------------------------------
 AA rating affirmed by two credit
 rating agencies or credit ratings at
 least at the main competitors' level           2         2         2         2
-------------------------------------------------------------------------------
 Dividend payout ratio at least 50%,
 provided that CET 1 ratio is at least
 15%. Dividend payout ratio is 30%
 until CET1 ratio of 15% has been
 achieved.                                                         30 > 50 (30)
-------------------------------------------------------------------------------

* OP Corporate Bank plc's financial targets will be updated by the end of the
year.
** Operating ratios exclude changes in reserving bases and amortisation on
intangible assets arising from the corporate acquisition.

Outlook towards the year end

Supported by the domestic market, the Finnish economy has recovered slowly
during the current year. Consumer spending and construction, in particular, have
contributed to economic growth but export performance has remained sluggish.
Unemployment has decreased and confidence improved. The world economy is
expected to continue its slow growth and exports should not see any quick
recovery. The Finnish economy is expected to continue its fairly slow growth,
supported in the first place by domestic demand. Unrest in financial markets
caused by the UK EU membership referendum eased off at the end of the reporting
period but Brexit and many other political and economic risks are still casting
a shadow over the outlook. In Finland, the faltering implementation of the
economic policy measures already decided may threaten recovery.

Market interest rates that have in part turned negative places a burden on the
net interest income of banks and erodes the investment income of insurance
institutions. Then again, low interest rates support customers' loan repayment
capacity, which has kept banking impairment loss low despite the prolonged
period of slow economic growth. Digitisation in the financial sector, upgrading
fragmented information system infrastructures and change in customer behaviour
will require significant development investments in the sector in the next few
years, which will increase expenses and weaken profitability in the short term.
Changes in the operating environment will highlight the role of operational
efficiency and profitability as well as a strong capital base.

OP Corporate Bank Group's consolidated earnings before tax are expected to be
clearly lower than earnings from continuing operations in 2015. The most
significant uncertainties affecting earnings relate to the rate of business
growth, impairment loss on receivables, developments in bond and capital
markets, the effect of large claims on claims expenditure and to the discount
rate applied to insurance liabilities.

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

Helsinki, 2 November 2016

OP Corporate Bank plc
Board of Directors

Financial reporting in 2017

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

Schedule for Financial Statements Bulletin for 2016 and Interim Reports in 2017:

Financial Statements Bulletin 2016              2 February 2017
Interim Report Q1/2017                                27 April 2017
Interim Report H1/2017                                 2 August 2017
Interim Report Q1-Q3/2017                          1 November 2017

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

For additional information, please contact
Jouko Pölönen, President and CEO, tel. +358 (0)10 253 2691
Carina Geber-Teir, Executive Vice President, Corporate Communications, tel.
+358 (0)10 252 8394

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



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Attachments:

OP Corporate Bank plc Q3 2016.pdf