1 January to 30 June, 2006
Key indicators 1-6/2006 1-6/2005 Change 1-12/2005 Earnings before tax, m illion 389 293 32.6 * 579 Cost/income ratio, % 57 53 3.6 55 Impairment losses of loan and guarantee portfolio, % 0.01 0.01 0.0 0.02 Return on equity (ROE), % 11.9 12.6-0.7 11.2 30 June 2006 Change from yearend 12 month change Dec. 31, 2005 Balance sheet total, billion 57.8 9.4 * 31.1 * 52.8 Market share, % Loans 31.0 0.4 0.7 30.5 Deposits 32.5 0.6-0.3 31.9 Mutual funds 21.2-1.1 5.0 22.3 Life and pension insurance savings 18.4 0.7 6.9 17.8 Tier I ratio, % 12.2-0.9-1.8 13.1 * Percentages. Other change figures percentage points.
30 June 2006 236 member cooperative banks OP Bank Group Central Cooperative OKO Bank plc Subsidiaries Shareholders of series A 31 000 4.0 million customers 1.1 million individual members
30 June 2006 MEMBER COOPERATIVE BANKS (236 BANKS) OP BANK GROUP PENSION FUND OP BANK GROUP PENSION FOUNDATION OP BANK GROUP CENTRAL COOPERATIVE OP BANK GROUP MUTUAL INSURANCE COMPANY OKO BANK PLC POHJOLA GROUP PLC OKO ASSET MANAGEMENT LTD HELSINKI OP BANK PLC OP LIFE ASSURANCE COMPANY LTD POHJOLA LIFE INSURANCE COMPANY LTD OP-KOTIPANKKI OYJ HELSINGIN SEUDUN OP-KIINTEISTÖKESKUS OY POHJOLA NON-LIFE INSURANCE COMPANY LTD A-INSURANCE LTD POHJOLA IT PROCUREMENT LTD OKO CORPORATE FINANCE LTD OKO VENTURE CAPITAL LTD OP BANK GROUP MORTGAGE BANK PLC OP FUND MANAGEMENT COMPANY LTD POHJOLA FUND MANAGEMENT COMP. LTD EUROOPPALAINEN INSURANCE COMPANY LTD POHJOLA PROPERTY MANAGEMENT LTD OKO CAPITAL EAST LTD ZAO OKO CAPITAL VOSTOK POHJOLAN SYSTEEMIPALVELU OY FD FINANSSIDATA OY OTHERS OTHERS OTHERS
results, compared with previous-year figures
Income statement million January 1 to June 30 2006 2005 Change million % Net interest income 409 401 7 2 Other income 560 282 278 99 Total income 969 683 285 42 Personnel costs 263 185 78 42 Other expenses 287 179 108 61 Total expenses 550 363 186 51 Impairment losses 1 1 0 42 Returns to owner-members 29 26 3 11 Earnings before tax 389 293 96 33 Cost/income ratio, % 57 53
Income statement January 1 to June 30 Net interest income Other income Personnel costs Other expenses Impairment losses 2006 2005 Returns to owner-members Earnings before tax 0 100 200 300 400 500 600 million
Income statement million Change January 1 to June 30 2006 2005 % Interest income 1 024 752 36.2 Interest expenses 616 351 75.5 Net interest income 409 401 1.8 Impairment losses 1 1 41.6 Net interest income after impairment losses 407 400 1.7 Net income from non-life insurance 176 Net income from life assurance 60 31 Net commissions and fees 202 170 18.8 Net income from trading 17 8 Net income from investments 61 46 33.3 Other operating income 45 26 70.6 Personnel costs 263 185 42.4 Other administrative expenses 148 100 48.0 Other operating expenses 138 78 76.7 Returns to owner-members 29 26 11.2 Share of affiliate profits/losses -1 1 Earnings before tax 389 293 32.6
Other income Net income from nonlife insurance Net income from life insurance Net commissions and fees Net income from trading and from investments January- June 2006 2005 Other operating income 0 30 60 90 120 150 180 210 million
Income statement by divisions 1 January to 30 June, 2006 million Retail Banking Asset Management Corporate Banking Non Life Insurance Group Treasury Others, incl. eliminations Net interest income 347 29 46-4 -13 4 409 Net income from non life insurance 0 0 0 177 0-2 176 Net income from life insurance 0 64 0 0 0-4 60 Other income 119 62 24 12 90 17 324 Total Income 467 154 69 186 77 16 969 Personnel costs 81 37 10 53 11 70 263 Other expenses 113 64 17 86 11-4 287 Total Expenses 194 101 27 139 22 66 550 Impairment losses on receivables 2 0-1 0 0 0 1 Returns to owner-members 15 6 0 0 0 8 29 Earnings before tax 255 47 43 47 54-58 389 Total
Earnings analysis of life insurance companies (IFRS) * OP Life Assurance Company Pohjola Life Insurance Company Milj. e 1-6/2006 1-6/2005 Change, % 1-6/2006 Premiums written 356 297 20 91 Investment income 90 133-32 34 Benefits paid -142-111 29-83 Change in technical provisions before supplementary benefits -262-283 -8-24 Supplementary benefits 0-8 -97 0 Operating expenses -14-13 12-7 Earnings before tax 27 15 75 11 * The sign digit indicates the direction of impact on earnings
quarterly figures
Quarterly performance 2005 2006 million I II III IV I II III IV Net interest income 198 204 198 195 199 210 Other income 150 132 138 213 303 257 Total income 347 336 336 409 502 467 Personnel costs 97 88 82 121 134 129 Other expenses 90 88 80 144 145 142 Total expenses 187 176 162 265 278 271 Impairment losses on receivables 2-1 2 3-2 3 Returns to owner-members 13 13 14 14 14 15 Earnings before tax 145 148 158 127 211 178 Cost/income ratio, % 54 52 48 65 55 58
Other income by quarter 2005 2006 I II III IV I II III IV Net income from non-life insurance 68 86 90 Net income from life insurance 15 16 14 22 34 26 Net commissions and fees 91 79 81 88 110 92 Net income from trading and from investments 28 26 26 10 51 27 Other operating income 15 11 17 24 23 22
Quarterly net interest income and net commissions and fees million 250 200 150 100 Net interest income Net commissions and fees 50 0 I II III IV/05 I II III IV/06
Quarterly net income from non-life and life insurance million 100 80 60 40 Net income from non-life insurance Net income from life insurance 20 0 I II III IV/05 I II III IV/06
Quarterly net income from trading and from investments million 40 35 30 25 20 15 Net income from trading Net income from investments 10 5 0 I II III IV/05 I II III IV/06
Quarterly expenses million 160 140 120 100 80 60 40 Personnel costs Other administrative expenses Other operating expenses 20 0 I II III IV/05 I II III IV/06
Quarterly impairment losses million 20 15 10 5 0-5 Gross impairment losses* Reversals Net impairment losses -10-15 -20 I II III IV/05 I II III IV/06 * Includes group-specific net impairment losses
Quarterly earnings before tax million 250 ROE 15 % 200 12 % 150 100 9 % 6 % ROE, % 50 3 % 0 I II III IV/05 I II III IV/06 0 %
Quarterly loans and deposits billion 40 35 30 25 20 15 Loans (excl. loans mediated from Treasury funds) Deposits 10 5 0 I II III IV/05 I II III IV/06
Quarterly life insurance liabilities and capital in mutual funds billion 12 10 8 6 4 Life insurance liabilities Capital in mutual funds 2 0 I II III IV/05 I II III IV/06
Quarterly life insurance liabilities and capital in mutual funds (incl. Pohjola from 1 January 2005) billion 12 10 8 6 4 Life insurance liabilities Capital in mutual funds 2 0 I II III IV/05 I II III IV/06
Quarterly non-life insurance premium revenue (IFRS)* 250 million 200 150 100 50 0 I II III IV/05 I II III IV/06 * Non-life insurance was included in OP Bank Group consolidated figures as of 1 Nov. 2005
Capital adequacy
Own funds and capital adequacy million 5 000 % 20 Other 4 000 15.6 14.6 14.6 13.9 12.9 16 Capital loans 3 000 12 2 000 8 Tier I own funds excl. capital loans 1 000 4 Capital adequacy ratio, % 0 6/2005 9/2005 12/2005 03/2006 06/2006 0
Capital adequacy ratio % 18 15 12 15.6 14.0 14.6 13.5 14.6 13.1 13.9 12.8 12.9 12.2 Total 9 Tier 1 6 3 0 6/2005 9/2005 12/2005 3/2006 6/2006
Capital adequacy Change million 30 June 2006 30 June 2005 (%-point) 31 Dec. 2005 Own funds Tier I 3 985 3 905 2.1 % 3 951 Tier II 563 561 0.4 % 760 Mandatory adjustments -335-98 -302 Total 4 213 4 367-3.5 % 4 409 Risk-weighted receivables, investments and off-balance sheet items 32 587 27 980 16.5 % 30 194 Capital adequacy ratio, % 12.9 15.6-2.7 %-point. 14.6 Tier I funds/risk-weighted items, total, % 12.2 14.0-1.7 %-point. 13.1
Tier I own funds Milj. 30.6.2006 30.6.2005 Change, % Equity capital 4 654 3 665 27 Pohjola minority interest Cooperative capital not included in equity capital 621 675-8 Capital loans 224 124 81 Intangible assets -1 099-83 Fair value reserve and other reserves -43-148 -71 Proposed dividend and interst pay-out -27-30 -9 Other items (eg. assets covering pension liabilities and fair value measurement of investment property) -344-297 16 Tier I own funds 3 985 3 905 2
Own funds calculated according to the Act on the Supervision of Financial and Insurance Conglomerates million 30.6.2006 31.12.2005 Muutos, % Equity capital of OP Bank Group 4 654 4 757-2 Business segment specific items 1 422 1 518-6 Goodwill and intangible assets -1 150-1 059 9 Items included in equity capital and in business segment specific items, which can not be included in conglomerate's own funds -603-828 -27 Conglomerate's own funds, total 4 322 4 388-2 Minimum amount of conglomerate's own funds (= required own funds) 2 854 2 589 10 Solvency of the conglomerate 1 468 1 799-18 Solvency ratio of the conglomerate (own funds / required own funds) 1.51 1.69-0.2 * * percentage points
Credit risk indicators million 30 June 2006 Change from yearend 12 month change, % Non-performing loans Households 93 34 2.3 Companies 69 13 4.1 Housing corporations and others 2 6-51.5 Total 163 24 1.9 Non-performing loans of loan and guarantee portfolio, % 0.4 0.1* -0.1* Change from a year 1-6/2006 earlier Impairment losses of loan and guarantee portfolio, % 0.01 0.00* * Percentage points.
Loans and leasing assets by sector Non-performing and interest-free loans million 30.6.2006 31.12.2005 Change 30.6.2006 Of loans Corporates and housing associations 10 562 28 % 9 911 27 % 652 7 % 70 0.7% Industry 2 297 6 % 2 199 6 % 99 4 % 18 0.8% Construction 679 2 % 632 2 % 47 7 % 5 0.8% Trade and catering 1 416 4 % 1 292 3 % 124 10 % 16 1.1% Real-estate investment 2 587 7 % 2 389 6 % 197 8 % 15 0.6% Other corporates 2 412 6 % 2 316 6 % 96 4 % 14 0.6% Housing associations 1 171 3 % 1 082 3 % 89 8 % 1 0.1% Finance and insurance -17 0 % 6 0 % -23-367 % 0 0.0% Public sector entities and non-profit organisations 731 2 % 668 2 % 63 9 % 0 0.0% Households 25 711 69 % 24 094 65 % 1 617 7 % 93 0.4% of which: housing loans 17 630 47 % 16 413 44 % 1 218 7 % 41 0.2% Foreign 320 1 % 167 0 % 154 92 % 0 0.0% Other items, net -42 0 % -38-4 Total 37 265 100 % 34 807 93 % 2 458 7 % 163 0.4%
Balance sheet
Main balance sheet items 70 60 billion 50 40 30 20 30 June 2005 30 June 2006 10 0 Balance sheet Loans Deposits
Balance sheet million 30 June 2006 30 June 2005 Change million % Receivables from financial institutions 299 487-188 -38.7 Financial assets for trading 5 319 3 224 2 095 65.0 Receivables from customers 37 270 32 813 4 457 13.6 Non-life insurance assets 2 929 2 929 Life insurance assets 5 565 3 311 2 254 68.1 Investment assets 1 635 1 600 35 2.2 Other items 4 810 2 683 2 126 79.2 Total assets 57 828 44 119 13 709 31.1 Liabilities to financial institutions 3 108 1 412 1 696 Liabilities to customers 26 908 25 293 1 615 6.4 Non-life insurance liabilities 2 141 2 141 Life insurance liabilities 5 196 2 963 2 233 75.4 Debt securities issued to the public 11 912 7 538 4 374 58.0 Other liabilities 3 909 3 247 662 20.4 Equity capital 4 654 3 665 988 27.0 Total liabilities and equity capital 57 828 44 119 13 709 31.1
Equity capital and cooperative capital 30 June 31 Dec. Change million 2006 2005 million % Share of parent company's owners Share capital + share issue account 244 245-1 -0.4 Cooperative capital 45 45 Reserves 2 192 2 249-57 -2.5 Retained earnings 2 170 2 061 109 5.3 Minority interest 4 203-199 -98.3 Equity capital, total 4 654 4 757-103 -2.2 Cooperative capital not included in equity capital 686 717-30 -4.2
Loans and customer funds
Market shares Date Market share, % Change from yearend 12 month change Loan portfolio 30.6.2006 31.0 0.4 0.7 Housing loans 30.6.2006 34.3 0.3 0.2 Corporate loans 30.6.2006 25.5 0.6 1.3 Deposit portfolio 30.6.2006 32.5 0.6-0.3 Mutual funds 30.6.2006 21.2-1.1 5.0 Life insurance savings 30.6.2006 18.4 0.7 6.9 Life and pension insurance premiums written 1-6/2006 28.6-8.5 * Non-life insurance premiums written/pohjola 1-12/2005 26.0-0.0 Changes expressed in percentage points. * Change from a year earlier.
Loans and customer funds 12-month 30 June change billion 2006 billion % Loan portfolio 37.3 4.5 13.6% Deposits 25.0 1.6 6.9% Mutual funds 11.0 4.5 70.0% Life insurance 5.2 2.3 76.4% Eliminations -2.8-1.0 54.1% Customer funds, total 38.5 7.5 24.0% Loans and customer funds, total 75.8 11.9 18.7 %
Deposits by customer sectors June 30, 2006 9 % 22 % 69 % Private households Corporate and public sector entities Agriculture and forestry
Credits* by customer sectors June 30, 2006 6 % Private households 34 % 60 % Corporate and public sector entities**) Agriculture and forestry *) incl leasing assets **) incl. entrepreneurs
Quarterly new loans billion 6.0 5.0 5.5 4.0 3.0 3.3 4.7 3.8 4.3 3.8 2.0 1.0 0.0 0.0 0.0 I II III IV/05 I II III IV/06
Quarterly net sales of mutual funds e million 800 2005: 1845 million Jan.- June 2006: 960 million 600 400 200 0 I II III IV I II III IV 2005 2006 Pohjola included from November 2005
Quarterly life and pension insurance premiums written e million 400 350 2005: 788 million Jan. - June 2006: 437 300 250 Pohjola 200 150 OP 100 50 0 I II III IV I II III IV 2005 2006
Customers, owner-members, et c.
Customers 30.6.2006 1000 customers 1000 customers % 1000 customers % OP Bank Group Customers* 4 013 908 29 42 1 Owner-members 1 148 29 3 15 1 Pohjola Pohjola loyal customer households** 354 26 8 20 6 * Pohjola customers included from October 2005 ** personal customers 12-month change Change from year-end
Quarterly net increase in number of members 10 000 Number Year 2005: + 28.000 1-6/2006: + 14.700 8 000 7 900 7 900 8 000 6 000 5 700 6 800 6 600 4 000 2 000 0 I II III IV I II III IV 2005 2006
Personnel (net of interns) 30.6.2006 Change from year-end (number) Member cooperative banks 6 771 211 Central Cooperative Consolidated 5 417 18 OKO Bank Group 3 068-186 OP Bank Group 12 206 232
Service network 30.6.2006 Change from year-end 12 month change Branch offices 708-75 0 banking services only 552 insurance services only 53 banking and insurance services 103 Paym ent ATMs 577-29 -49 Internet client term inals 611-20 -18 Cash dispensers 1681-8 -20 Online service agreem ents 1 048 000 52 300 96 700