1 January to 31 December 2006
Key indicators 2006 2005 Change * Earnings before tax, EUR m illion 800 579 38 Cost/incom e ratio, % 55.4 55.3 0.1 Im pairm ent losses on the loan and guarantee portfolio, % 0.02 0.02 0.0 Return on equity (ROE), % 12.1 11.2 0.9 Return on equity at fair value, % 11.4 13.5-2.1 Average personnel 12 148 9 839 23 31.12.2006 31.12.2005 Change * Total assets, EUR billion 59.5 52.8 12.7 Capital adequacy Ratio of own funds to the minimum amount of own funds** 1.56 1.69-0.13 Tier 1 ratio, % *** 12.7 13.1-0.4 Market share, % Of total loans 31.1 30.5 0.6 Of total deposits 32.7 31.9 0.8 Of capital invested in m utual funds 21.8 22.3-0.5 Insurance savings through life and pension insurance 19.1 17.8 1.3 * Percentage point change, except for earnings before tax, total assets and average number of personnel, for which the change is stated in per cent, as well as the ratio of own funds to the minimum amount of own funds, for w hich the change is stated as a change in the ratio. ** Pursuant to the Act on the Supervision of Financial and Insurance Conglomerates. *** Pursuant to the Credit Institutions Act.
31 December 2006 232 member cooperative banks OP Bank Group Central Cooperative OKO Bank plc Subsidiaries Shareholders of series A 32 200 4.0 million customers 1.2 million individual members
31 December 2006 MEMBER COOPERATIVE BANKS (232 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 HELSINKI OP BANK PLC HELSINGIN SEUDUN OP-KIINTEISTÖKESKUS OY OP LIFE ASSURANCE COMPANY LTD OKO ASSET MANAGEMENT LIMITED POHJOLA NON-LIFE INSURANCE COMPANY LTD A-INSURANCE LTD POHJOLA IT PROCUREMENT LTD OKO CORPORATE FINANCE LTD OKO VENTURE CAPITAL LTD OP-KOTIPANKKI OYJ OP BANK GROUP MORTGAGE BANK PLC EUROOPPALAINEN INSURANCE COMPANY LTD POHJOLA PROPERTY MANAGEMENT LTD SEESAM NON-LIFE INSURANCE COMPANIES OKO CAPITAL EAST LTD ZAO OKO CAPITAL VOSTOK OP FUND MANAGEMENT COMPANY LTD FD FINANSSIDATA OY OTHERS OTHERS OTHERS
results, compared with previous-year figures
Income statement million 1 January to 31 December 2006 2005 Change million % Net interest income 883 794 89 11 Other income 1 073 633 440 69 Total income 1 956 1 427 529 37 Personnel costs 527 387 140 36 Other expenses 556 403 154 38 Total expenses 1 083 790 294 37 Impairment losses on receivab 9 6 4 62 Returns to owner-members 64 53 11 20 Earnings before tax 800 579 221 38 Cost/income ratio, % 55 55
Income statement 1 January to 31 December Net interest income Other income Personnel costs Other expenses Impairment losses on receivables 2006 2005 Returns to owner-members Earnings before tax 0 200 400 600 800 1000 1200 million
Income statement million Change 1 January to 31 December 2006 2005 million % Interest income 2 340 1 575 765 48.6 Interest expenses 1 457 780 677 86.7 Net interest income 883 794 89 11.2 Impairment losses on receivables 9 6 4 62.3 Net interest income after impairment losses 874 789 85 10.8 Net income from non-life insurance operations 328 68 259 Net income from life insurance operations 110 67 43 64.7 Net commissions and fees 396 340 57 16.7 Net trading income 32 27 4 15.9 Net investment income 112 62 50 80.6 Other operating income 92 68 24 36.1 Personnel costs 527 387 140 36.2 Other administrative expenses 290 220 69 31.5 Other operating expenses 267 183 84 46.1 Returns to owner-members 64 53 11 20.3 Share of associates' profits/losses 2 0 2 307.4 Earnings before tax 800 579 221 38.2
Other income Net income from non-life insurance Net income from life insurance January- December Net commissions and fees Net trading and investment income 2006 2005 Other operating income 0 50 100 150 200 250 300 350 400 million
Income statement of business segments 1 January to 31 December 2006 Banking and Non-Life Life Eliminations and Other million Investment Services Insurance Insurance Operations Total Net interest income 899-8 -3-5 883 Net income from non-life insurance 0 332 0-4 328 Net income from life insurance 0 0 119-8 110 Other income 596 23 14 2 635 Total income 1 495 347 131-16 1 956 Personnel costs 334 99 8 86 527 Other expenses 446 170 54-113 556 Total expenses 779 268 63-27 1 083 Impairment losses on receivables 9 0 0 1 9 Returns to ow ner-members 64 0 0 0 64 Earnings before tax 643 78 68 11 800
Income statement of business segments Banking and Investment Services Change million 1-12/2006 1-12/2005 million % Net interest income 899 803 96 12 Other income 596 511 85 17 Total income 1 495 1 314 181 14 Personnel costs 334 300 34 11 Other expenses 446 441 4 2 Total expenses 779 741 38 5 Impairment losses on receivables 9 6 3 48 Returns to owner-members 64 50 14 28 Earnings before tax 643 517 126 24
Income statement of business segments Non-Life Insurance million 1-12/2006 1-12/2005 Net interest income -8-1 Net income from non-life insurance 332 69 Other income 23 7 Total income 347 75 Personnel costs 99 16 Other expenses 170 31 Total expenses 268 47 Earnings before tax 78 27
Income statement of business segments Life Insurance Change million 1-12/2006 1-12/2005 million % Net interest income -3-1 -2 385 Net income from life insurance 119 58 60 103 Other income 14 3 12 460 Total income 131 60 70 116 Personnel costs 8 4 5 132 Other expenses 54 30 24 187 Total expenses 63 34 29 86 Earnings before tax 68 27 41 154
quarterly figures
Quarterly performance 2005 2006 million I II III IV I II III IV Net interest income 198 204 198 195 202 214 226 241 Other income 150 132 138 213 300 253 243 277 Total income 347 336 336 409 502 467 469 519 Personnel costs 97 88 82 121 134 129 115 149 Other expenses 90 88 80 144 145 142 124 146 Total expenses 187 176 162 265 278 271 239 295 Impairment losses on receivables 2-1 2 3-2 3 3 5 Returns to owner-members 13 13 14 14 14 15 18 18 Earnings before tax 145 148 158 127 211 178 209 202 Cost/income ratio, % 54 52 48 65 55 58 51 57
Other income by quarter 2005 2006 I II III IV I II III IV Net income from non-life insurance 68 86 90 67 85 Net income from life insurance 15 16 14 22 34 26 20 30 Net commissions and fees 91 79 81 88 110 92 92 101 Net income from trading and from investments 28 26 26 10 48 23 39 34 Other operating income 15 11 17 24 23 22 24 24
Quarterly net interest income and net commissions and fees million 300 250 200 150 100 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 14 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 14 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 14.6 13.9 12.9 14.0 14.3 16 Capital loans 3 000 12 2 000 8 Tier 1 own funds excl. capital loans 1 000 4 Capital adequacy ratio, % 0 12/2005 03/2006 06/2006 09/2006 12/2006 0
Capital adequacy ratio % 18 15 12 14.6 13.1 13.9 12.8 12.9 12.2 14.0 12.4 14.3 12.7 Total 9 Tier 1 6 3 0 12/2005 3/2006 6/2006 9/2006 12/2006
Capital adequacy Change million 31 Dec. 2006 31 Dec. 2005 (%-point) Own funds Tier 1 4 271 3 951 8.1 % Tier 2 886 760 16.5 % Mandatory adjustments -349-302 15.3 % Total 4 808 4 409 9.0 % Risk-weighted receivables, investments and off-balance-sheet items 33 718 30 194 11.7 % Capital adequacy ratio, % 14.3 14.6-0.3 %-points Tier 1 funds/risk-weighted items, total, % 12.7 13.1-0.4 %-points
Tier 1 own funds million 31.12.2006 31.12.2005 Change, % Equity capital 5 124 4 757 8 Pohjola minority interest -196 Cooperative capital not included in equity capital 595 715-17 Capital loans 224 224 0 Intangible assets -1 064-941 13 Fair value reserve and other reserves -144-183 -21 Proposed dividend and interest pay-out -75-71 7 Other items (eg. assets covering pension liabilities and fair value measurement of investment property) -388-353 10 Tier 1 own funds 4 271 3 951 8
Own funds calculated according to the Act on the Supervision of Financial and Insurance Conglomerates million 31.12.2006 31.12.2005 Change, % Equity capital of OP Bank Group 5 124 4 757 8 Business segment specific items 1 577 1 518 4 Goodwill and intangible assets -1 133-1 059 7 Items included in equity capital and in business segment specific items, which cannot be included in conglomerate's own funds -883-828 7 Conglomerate's own funds, total 4 685 4 388 7 Minimum amount of conglomerate's own funds (= required own funds) 3 002 2 589 16 Solvency of the conglomerate 1 682 1 799-6 Solvency ratio of the conglomerate (own funds / required own funds) 1.56 1.69-0.13 * * change in ratio
Credit risk indicators million 31.12.2006 31.12.2005 Change, % Non-performing loans Households 78 69 13.2 Companies 47 61-23.1 Housing corporations and others 3 1 98.8 Total 128 131-2.6 Non-performing loans of loan and guarantee portfolio, % 0.3 0.4-0.1* 1-12/2006 1-12/2005 Change Impairment losses of loan and guarantee portfolio, % 0.02 0.02 0.01* * Percentage points
Loan and guarantee portfolio by sector Non-performing and interest-free loans EUR million 31.12.2006 31.12.2005 Change, % 31.12.2006 % of loan and guarantee portfolio Corporates and housing associations 12 975 11 416 14 49 0.4 % Industry 2 970 2 796 6 11 0.4 % Construction 1 161 988 18 6 0.5 % Trade and catering 1 685 1 383 22 12 0.7 % Real-estate investment 2 905 2 418 20 9 0.3 % Other corporates 2 960 2 749 8 9 0.3 % Housing associations 1 294 1 083 20 2 0.2 % Finance and insurance 77 117-34 Public-sector entities and non-profit organisations 774 673 15 1 0.1 % Households 27 392 24 130 14 78 0.3 % Housing loans 18 953 16 413 15 36 0.2 % Foreign 704 240 194 0 0.0 % Total 41 826 36 537 15 128 0.3 %
Balance sheet
Main balance sheet items 70 60 50 billion 40 31 Dec. 2005 30 20 31 Dec. 2006 10 0 Balance sheet Loans Deposits
Balance sheet million 31 Dec. 2006 31 Dec. 2005 Change million % Receivables from financial institutions 344 666-321 -48.3 Financial assets for trading 4 816 3 841 975 25.4 Receivables from customers 39 595 34 814 4 781 13.7 Non-life insurance assets 2 761 2 740 20 0.7 Life insurance assets 6 061 5 385 675 12.5 Investment assets 1 413 1 652-239 -14.5 Other items 4 545 3 746 799 21.3 Total assets 59 535 52 845 6 690 12.7 Liabilities to financial institutions 1 088 2 025-937 -46.3 Liabilities to customers 27 715 26 475 1 240 4.7 Non-life insurance liabilities 2 099 1 924 175 9.1 Life insurance liabilities 5 667 4 918 750 15.2 Debt securities issued to the public 13 500 8 891 4 609 51.8 Other liabilities 4 341 3 854 488 12.7 Equity capital 5 124 4 757 366 7.7 Total liabilities and equity capital 59 535 52 845 6 690 12.7
Equity capital and cooperative capital 31 Dec. 31 Dec. Change million 2006 2005 million % Share of parent company's owners Share capital + share issue account 245 245 0 0.1 Cooperative capital 99 99 Reserves 2 295 2 249 46 2.0 Retained earnings 2 483 2 061 422 20.5 Minority interest 2 203-201 -99.0 Total equity capital 5 124 4 757 366 7.7 Cooperative capital not included in equity capital 597 717-120 -16.7
Loans and customer funds
Market shares 31.12.2006 31.12.2005 Change Loan portfolio 31.1 30.5 0.6 Housing loans 34.4 34.0 0.4 Corporate loans 25.8 24.9 0.9 Deposit portfolio 32.7 31.9 0.8 Mutual funds 21.8 22.3-0.5 Life insurance savings 19.1 17.8 1.3 1-12/2006 1-12/2005 Life and pension insurance premiums w ritten 28.4 30.4-2.0 Non-life insurance premiums written/pohjola 26.0 Changes expressed in percentage points * 2006 m arket share not available
Loans and customer funds 12-month 31 December change billion 2006 billion % Loan portfolio 39.6 4.8 13.7% Deposits 25.8 1.6 6.5% Mutual funds 13.3 3.3 33.3% Life insurance 5.7 0.8 15.3% Eliminations -3.3-0.9 Customer funds, total 41.5 4.8 12.9% Loans and customer funds, total 81.1 9.5 13.3 %
Deposits by customer sector 31 December 2006 9 % Private households 22 % Corporate and public sector entities *) Agriculture and forestry 68 % *) incl. entrepreneurs
Credits* by customer sector 31 December 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 4.4 4.3 2.0 1.0 0.0 I II III IV/05 I II III IV/06
Quarterly net sales of mutual funds 1200 million 1000 2005: 1 845 million 2006: 2 392 million 1018 800 600 608 565 400 395 415 427 373 436 200 0 I II III IV I II III IV 2005 2006 Pohjola included from November 2005
Quarterly life and pension insurance premiums written million 400 2005: 788 million 2006: 867 million 350 300 250 148 45 94 Pohjola 200 150 100 158 140 137 205 210 35 146 33 112 191 OP 50 0 I II III IV I II III IV 2005 2006 Employees group life insurance included only at 31. Dec
Customers, owner-members, et c.
Customers OP Bank Group 31.12.2006 31.12.2005 Change 1000 customers 1000 customers customers % Customers* 4 046 3 964 82 2 Owner-members 1 163 1 133 30 3 Pohjola Pohjola loyal customer households* 367 334 34 10 * personal customers
Quarterly net increase in number of members Number 10 000 8 000 Year 2005: + 28 000 Year 2006: + 30 500 7 900 7 900 8 000 9 200 6 000 5 700 6 800 6 600 6 700 4 000 2 000 0 I II III IV I II III IV 2005 2006
Personnel (net of interns) 31.12.2006 31.12.2005 Change (number) Member cooperative banks 6 661 6 560 101 Central Cooperative Consolidated 5 459 5 399 60 OKO Bank Group 2 919 3 254-335 OP Bank Group 12 139 11 974 165
Service network 31.12.2006 31.12.2005 Change Locations 670 783-113 offering banking services only 466 674 offering insurance services only 29 103 offering banking and insurance services 175 6 OP-Kiinteistökeskus outlets 174 165 9 Online custom er term inals 603 631-28 Paym ent ATMs 555 606-51 Online service agreem ents 1 094 000 996 000 97 900
5-year trend
Earnings before tax and return on assets (2002-2003 FAS) million 1 000 % 2.5 800 600 400 2.0 1.5 1.0 Earnings before tax, million Return on assets (ROA), % 200 0.5 0 2002 2003 2004 2005 2006 0.0
Net interest income and net commissions and fees (2002-2003 FAS) million 1 000 800 Net interest income 600 400 Net commissions and fees 200 0 2002 2003 2004 2005 2006
Impairment losses on receivables (2002-2003 FAS: Loan and guarantee losses) million 15 12 9 6 3 0 2002 2003 2004 2005 2006
Non-performing loans 200 million 2,0 % 150 1,5 % Interest-free loans 100 1,0 % Non-performing loans 50 0,5 % % of loan and guarantee portfolio 0 2002 2003 2004 2005 2006 0,0 %
Own funds and capital adequacy ratio (2002-2003 FAS) billion % 5.0 25 Tier II own funds 4.0 20 3.0 15.2 15.4 15.5 14.6 14.3 15 Tier I own funds 2.0 10 Capital adequacy ratio, % 1.0 0.0 5 0 Tier I funds/ Riskweighted items, total, % 2002 2003 2004 2005 2006
Balance sheet (2002-2003 FAS) billion 60 59.5 50 52.8 40 41.5 30 31.6 35.0 20 10 0 2002 2003 2004 2005 2006
Customer funds 50 billion 40 30 20 10 Mutual funds Life insurance Deposits 0 2002 2003 2004 2005 2006
Loans and deposits billion 40 30 20 Loans (excl. loans mediated from Treasury funds) Deposits 10 0 2002 2003 2004 2005 2006
Life insurance and mutual funds billion 15 12 9 Life insurance 6 Mutual funds 3 0 2002 2003 2004 2005 2006
Customers and owner-members Customers 5 000 000 Members 2 500 000 4 000 000 2 000 000 3 000 000 1 500 000 Customers 2 000 000 1 000 000 1 000 000 500 000 Owner-members 0 2002 2003 2004 2005 2006 0
Service network 800 600 Locations * 400 Payment ATMs 200 Online customer terminals 0 2002 2003 2004 2005 2006 * from 2005 banking and insurance locations
Personnel 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2002 2003 2004 2005 2006