OP Pohjola Group's Q background material

Transcription

1 OP Pohjola Group's Q background material

2 Year-on-year results Quarterly figures Capital adequacy Balance sheet Loans and customer funds Customers, owner-members et c. 5-year trend Contents

3 OP Pohjola Group

4

5 s business segments Banking Cooperative banks, Helsinki OP Bank Plc, OP-Kotipankki Oyj, OP Mortgage Bank and OP Fund Management Company Ltd. Pohjola Group's Banking and Asset Management segments OP Bank Group Mutual Insurance Company Non-life Insurance Pohjola Insurance Ltd, Eurooppalainen Insurance Company Ltd, A-Insurance Ltd and Seesam insurance companies in the Baltic countries Life Insurance OP Life Assurance Company Limited Other operations Central Cooperative, OP- Services Ltd and Pohjola's Group management

6 Key indicators 1-3/ /2010 Change, % 1-12/2010 Earnings before tax, million Banking Non-life Insurance Life Insurance Returns to owner-members and OP-bonus customers, million /03/ /03/2010 Change* 31/12/2010 Ratio of capital base to minimum of capital base Tier 1 ratio, % Non-performing receivables/ loan and guarantee portfolio Market share, % Total loans Total deposits Capital invested in mutual funds Insurance savings through life and pension insurance Non-life insurance premium income 27.8 * Percentage point change, except for the ratio of capital base to minimum of capital base, for which the change is stated as a change in the ratio.

7 7 Joint responsibility and joint security Under the Act on Cooperative Banks and Other Cooperative Credit Institutions, the amalgamation of the cooperative banks comprises the organisation s central institution ( Central cooperative), the Central Cooperative s member credit institutions and the companies belonging to their consolidation groups. This amalgamation is supervised on a consolidated basis. The central institution and its member banks are ultimately responsible for each other's liabilities and commitments. The central institution's members at the end of the year comprised 's member cooperative banks as well as Pohjola Bank plc, Helsinki OP Bank Plc, OP Mortgage Bank and OP-Kotipankki Oyj. 's insurance companies do not fall within the scope of joint responsibility. Deposit banks belonging to, i.e. its member cooperative banks, Pohjola Bank plc, Helsinki OP Bank Plc and OP-Kotipankki Oyj, are regarded as a single bank with respect to deposit protection. Under legislation governing the Investors Compensation Fund, is also considered a single entity for purposes of compensation protection.

8 Year on year Results

9 Earnings before tax 250 million /2010 Investments* Impairment losses on receivables Net interest income Net commissions and fees Expenses Other items 1-3/2011 *) Investments = Life and Non-life insurance investment income + Net trading and investment income

10 Income statement Net interest income Other income Personnel costs Other expenses Impairments of receivables Returns to owner-members and OP bonus customers Earnings before tax 1 January to 31 March million 400

11 Other income Net income from Non-life Insurance Net income from Life Insurance Net commissions and fees Net trading and investment income Other operating income January - March million

12 Income Statement million Change 1 January to 31 March million % Interest income Interest expenses Net interest income Impairments of receivables Net interest income after impairment losses Net income from Non-life Insurance operations Net income from Life Insurance operations Net commissions and fees Net trading income Net investment income Other operating income Personnel costs Other administrative expenses Other operating expenses Returns to owner-members and OP bonus customers Share of associates' profits/losses Earnings before tax

13 Income statement by business segment 1 January to 31 March 2011 million Banking Non-Life Insurance Life Insurance Eliminations and Other Operations Total Net interest income Net income from non-life insurance Net income from life insurance Other income Total income Personnel costs Other expenses Total expenses Impairment losses on receivables Returns to owner-members Earnings before tax Cost /income ratio, % 55

14 Income statement by business segment Banking 6 19 Non-Life Insurance 1 37 Life Insurance 19 Eliminations and 29 Other Operations million / /2010

15 Banking Net interest income Impairment losses on receivables Other income Personnel costs Other expenses Returns to ownermembers Earnings before tax million / /2010

16 Non-life Insurance Insurance premium revenue Insurance claims and benefits Net investment income Unwinding of discount and other items Total net income Other income Total expenses Earnings before tax million / /2010

17 Life Insurance Premiums written Net investment income.. Of which unit-linked Claims incurred Change in insurance contract liabilities Other items Total net income Other income Total expenses Earnings before tax million / /2010

18 Quarterly figures

19 Quarterly performance 2010 million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net interest income Other income Total income Personnel costs Other expenses Total expenses Impairments of receivables Returns to owner-members and OP bonus customers Earnings before tax

20 Other income by quarter million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net income from non-life insurance Net income from life insurance Net commissions and fees Net income from trading and investments Other income Total

21 Net interest income and net commissions and fees 300 million Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11 Net interest income Net commissions and fees

22 Net income from non-life and life insurance 160 million Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11 Net income from non-life insurance Net income from life insurance

23 Net income from trading and investments 40 million Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11 Net income from trading Net income from investments

24 Expenses 200 million Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11 Personnel costs Other administrative expenses Other operating expenses

25 Quarterly impairments of receivables 60 million Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11

26 Earnings before tax 250 million ROE 15% % 150 9% 100 6% 50 3% 0 Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11 Return on equity (ROE), % 0%

27 Earnings before tax at fair value 500 million ROE 28% % % % 100 4% 0 Q1 Q2 Q3 Q4/10 Q1/11 Q2 Q3 Q4/11 Return on equity at fair value, % -2%

28 Loans and deposits 60 billion Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11 Loans (excl. loans granted from Goverment funds) Deposits

29 Life insurance savings and capital in mutual funds 16 billion Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11 Insurance savings Capital in mutual funds

30 300 million Non-life insurance premium revenue (IFRS) Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11

31 Capital adequacy

32 Two separate capital adequacy ratios Consolidated capital adequacy = capital adequacy of the amalgamation of cooperative banks The Group's operations are based on the Act on the Amalgamation of Deposit Banks that came into effect on 1 July In the first half of 2010, the Group's operations were still regulated by provisions in the Act on Cooperative Banks and Other Cooperative Institutions. Act on the Amalgamation of Deposit Banks prescribes a minimum capital requirement for an amalgamation of cooperative banks. This is calculated using the provisions in the Act on Credit Institutions. The amalgamation of cooperative banks consists of the amalgamation's central institution ( Central Cooperative), the central institutions member credit institutions and the companies belonging to their consolidation groups. Although s insurance companies do not belong to the amalgamation of the cooperative banks, investments made in them have a major impact on capital adequacy calculated in accordance with the capital adequacy regulations for credit institutions. Capital adequacy ratio (under the Act on the Supervision of Financial and Insurance Conglomerates) is a financial and insurance conglomerate, pursuant to the Act on the Supervision of Financial and Insurance Conglomerates. The conglomerate is governed by specific provisions of the capital adequacy requirement. 's capital adequacy pursuant to the Act on the Supervision of Financial and Insurance Conglomerates is calculated using the consolidation method, whereby assets included in capital resources but not included in equity capital, under the regulations for the banking or insurance industry, are added to the equity capital in the conglomerate's balance sheet. Capital resources may not include items not available for covering the losses of other companies belonging to the conglomerate. The financial and insurance conglomerate's minimum capital requirement consists of the credit institutions' consolidated minimum capital requirement and the insurance companies' joint minimum operating capital. In view of both capital adequacy requirements, 's risk-bearing capacity is strong.

33 Tier 1 Capital 31 March ,000 milj. e 7,000 6,000 6, , ,447 4,000 3,000 2,000 1,000 0 Equity capital Other Tier 1 capital items Deductions from Tier 1 capital Investment in insurance companies and financial institutions Impairments shortfall of expected losses Net Tier 1 capital

34 Conglomerate s total capital base 31 March ,000 million. 8,000 7, ,000 5,000 4,000 3,000 6,725 6,411 2,000 1,000 0 Equity capital Business segment specific items Goodwill and intangible assets Equalisation provision Other items included in equity capital and business segment specific items, but not included in the conglomerate s capital base Conglomerate's total capital base

35 The amalgamation of the cooperative banks Capital resources and capital adequacy 6,000 million 5, , Subordinated loans 3, ,000 8 Tier 1 capital resources excl. subordinated loans 1, March 2010 June 2010 Sept Dec March Capital adequacy ratio, %

36 Adopting the Internal Ratings Based Approach In its calculation of capital requirement for credit risk, OP-Pohjola Group will phase in the Internal Ratings Based Approach (IRBA). The Internal Ratings Based Approach (IRBA) as already used in the capital adequacy measurement of Pohjola Bank plc's corporate and institutional customers' credit risks. The target for adopting IRBA for all other liabilities is September 2011, but until then the capital requirement for credit risk of such items is calculated using the Standardised Approach. The capital requirement for credit risk concerning state and central banks will continue to be calculated using the Standardised Approach. The same will be done to market risks. The use of internal ratings reduces the Group's capital requirement, but makes it more susceptible to market fluctuations.

37 Balance sheet

38 Key balance sheet items billion Balance sheet Loans Deposits Debt securities issued to the public 31 March March 2011

39 million Balance sheet 31 March March 2010 Change million % Receivables from credit institutions 1,639 1, Financial assets at fair value through profit or loss 438 1, Receivables from customers 57,131 53,679 3, Non-life Insurance assets 3,415 3, Life Insurance assets 7,594 6, Investment assets 7,990 7, Other items 7,042 9,353-2, Total assets 85,250 83,211 2, Liabilities to credit institutions 1,879 2, Liabilities to customers 38,743 38, Non-life Insurance liabilities 2,782 2, Life Insurance liabilities 7,275 6, Debt securities issued to the public 19,844 19, Other liabilities 8,001 7, Equity capital 6,725 6, Total liabilities and equity capital 85,250 83,211 2,

40 Equity capital and cooperative capital 31 March 31 March Change million million % Share of 's owners Share capital Cooperative capital Fair value reserve Other reserves 2,684 2, Retained earnings 3,625 3, Minority interest Total equity capital 6,725 6, Cooperative capital not included in equity capital

41 Maturing of debt securities issued to the public total of 19.8 mrd. e

42 Loans and customer funds

43 Market shares Loan portfolio 32.9 Home mortgages 35.8 Corporate loans (icl. housing association) 29.5 Deposit portfolio 31.7 Mutual funds 22.6 Life and pension insurance premiums written 23.5 % March, 2011 March, 2010

44 Deposits by customer sector 31 March % Households 29% Corporate and public sector entities *) Agriculture and forestry 66% *) incl. entrepreneurs

45 Loans* by customer sector 31 March % Households 33% Corporate and public sector entities**) Agriculture and forestry 62% *) incl lease assets **) incl. entrepreneurs

46 Loan and guarantee portfolio by sector million 31 March March 2010 million Change, % million Non-performing and zero-interest loans % of loan and guarantee portfolio Enterprises and housing associations 20,495 19,254 1, % Renting and operation of residential real estate incl. housing associations 3,913 3, % Other renting and operating of real estate 2,591 2, % Wholesale and retail trade 2,185 2, % Services 1,530 1, % Construction 1,505 1, % Transportation and storage 1,361 1, % Manufacture of machinery and and equipment (incl. services) 1,137 1, % Buying and selling of own real estate % Forest Industry % Financial and insurance services % Agriculture, forestry and fishing % Metal Industry % Food Industry % Chemical Industry % Energy % Other manufacturing % Other industries % Public corporations and non-profit organisations 1, % Households 38,054 36,047 2, % Adjustments Total 59,613 56,300 3, %

47 Non-performing and zero-interest receivables March million (12-month change -12.8%) Others; 7 million Corporates and housing associations; 111 million; (change -16%) Households; 185 million; (change -8%) Impairment losses on groups of receivables are not included in the graph ( -45 million)

48 New loans by quarter 8.0 billion 2010: 18.7 billion 2011: 5.2 billion Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11

49 Net sales of mutual funds by quarter 1 1,000 million : 497 million 2010: -398 million Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11

50 Life and pension insurance premiums written by quarter million : 1,846 million 2011: 214 million Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11 Employees group life insurance included only at 31 Dec.

51 Customers owner members et c.

52 Breakdown of Customer Base 4,500 1,000 customers 4,000 3,500 3,000 2,500 2,000 1,500 1, /05 12/06 12/07 12/08 12/09 12/10 03/11 Non-life insurance customers Bank and non-life insurance cust. Bank customers

53 Net increase in members by quarter 12,000 Number 2010: + 33, : + 6,500 9,000 8,600 8,800 8,400 7,900 6,000 6,500 3,000 0 Q1 Q2 Q3 Q4/10 Q1 Q2 Q3 Q4/11

54 s personnel 31 March 2011 total of persons (+ 124 in a year) Other OP Pohjola; (change +148 ) Pohjola Group; (change +52) Member cooperative banks incl. Helsinki OP; (change 76)

55 Service network 31 March month change eservices Agreements 1,510, ,000 Locations providing both banking and insurance services Private banking locations 34 5 OP-Kiinteistökeskus estate agents Online customer terminals Payment ATMs 1-425

56 5 year trend

57 1,200 1 million Earnings before tax and return on economic capital % /2011 Earnings before tax Return on economic capital (12-month rolling), % 0 calculation principles of economic capital have been changed between 2007 and 2008

58 Earnings before tax 1,500 million 1, /2011 Earnings before tax Earnings before tax at fair value

59 Income 1,400 million 1,200 1, /2011 Net interest income Net commissions and fees Other income

60 200 million Impairments of receivables % / Impairments of receivables % of loan and guarantee portfolio

61 Non-performing loans 300 million % 2.0 % 1.6 % 1.2 % 0.8 % 0.4 % / % Non-performing loans Zero-interest loans % of loan and guarantee portfolio

62 The amalgamation of the cooperative banks Capital resources and capital adequacy ratio 6,0 6.0 billion / Tier I capital resources Other capital resources Capital adequacy ratio, %

63 Balance sheet 90 billion /2011

64 Customer funds 60 billion /2011 Deposits Life insurance savings Mutual funds

65 Loans and deposits 60 billion /2011 Loans (excl. loans mediated from Treasury funds) Deposits

66 Premiums written in life and non-life insurance 2,000 million 1,600 1, /2011 Premiums written in life insurance Premiums written in non-life insurance

67 Thank You