OP Corporate Bank plc
Stock exchange opening February 10, 2021 at 9:00 a.m. EET
Financial report bulletin
Financial report of OP Corporate Bank plc from January 1 to December 31, 2020
- Consolidated Merits before taxes rose to EUR 529 million (412). The insurance result rose by 38% to EUR 555 million (402) and the interest result by 10% to EUR 325 million (295). The transfer of the remainder of the management of the statutory income-related pension insurance to Ilmarinen Mutual Pension Insurance Company at the end of 2020 reduced the pension costs of the Group and the insurance segment by EUR 85 million. Without taking into account the effect of the transfer of the pension obligation, the total costs increased by 1% to EUR 641 million. The consolidated result fell by 41% of the investment result to EUR 228 million (384).
- Corporate business Earnings before taxes rose by 15% to EUR 301 million (262). The investment result rose by 22% to EUR 140 million (115) and the interest result by 3% to EUR 395 million (383). The result of corporate banking was weakened by an increase in expenses to EUR 231 million (220). The impairment loss for receivables amounted to EUR 53 million (51). The loan portfolio grew from year to December by 1% to EUR 24.0 billion (23.7).
- insurance Merits before taxes rose by 44% to EUR 288 million (200). The insurance result rose by 38% to EUR 556 million (402). The reduction in the discount rate for insurance liability increased non-life insurance claims by EUR 45 million (136). The investment result fell by 69% to EUR 75 million (242). The operational combined ratio improved to 87.8% (92.7).
- Other operations The pre-tax result was EUR –58 million (–50). Liquidity remained good despite the Covid 19 crisis.
- The group The CET1 ratio was 15.1% (14.9).
|Earnings before taxes: € million||Q1–4 / 2020||Q1–4 / 2019||Change,%|
|Other operations||-58||-50||– –|
|Return on Equity (ROE),%||9.2||7.8||1.4 *|
|Return on Investment (ROA),%||0.55||0.49||0.06 *|
|December 31, 2020||December 31, 2019||Change,%|
|CET1 ratio,%||15.1||14.9||0.1 *|
|Loan portfolio in € m||24,485||23,829||2.8|
|Deposits in € m||13,300||11,103||19.8|
|Ratio of bad debts to loan and guarantee portfolio,%||1.1||0.5||0.5 *|
|Ratio of the impairment loss for receivables to the loan and guarantee portfolio,%||0.20||0.19||0.01 *|
Comparisons derived from the profit and loss account are based on figures that were reported a year ago for the corresponding periods. Unless otherwise stated, the balance sheet and other cross-sectional figures as of December 31, 2019 are used for comparison.
* Change in the ratio
Outlook for 2021
The number of Covid-19 infections rose in most countries in the autumn. As a result, the economic recovery that began last summer stalled somewhat. Towards the end of the year, the impact of the pandemic on the economy subsided, mainly affecting the service sector. The economic recovery will continue as the pandemic continues to ease. The expectations on the financial markets are positive. Central bank policies are expected to calm markets and keep interest rates low.
The Covid-19 pandemic will continue to create uncertainty about the economic outlook. A sudden worsening of the pandemic would affect OP Corporate Bank in three ways: economic uncertainty and uncertainty in the financial and capital markets would increase, an increase in financial difficulties among customers would increase credit risk and decrease the demand for services, and a worsening disease situation could make it difficult for OP Financial Group to operate efficiently.
The most important uncertainties affecting earnings development due to the Covid 19 crisis relate to changes in the interest and investment environment and the development of impairment expenses. In addition, the future development of earnings will be influenced by the market growth rate, changes in the competitive situation and the effects of major claims on claims expenditure.
The profit estimates for the full year 2021 will only be published at the level of the OP finance group in the annual financial statements and in the interim reports.
All forward-looking statements in this interim report that express the expectations, beliefs, estimates, forecasts, projections and assumptions of management are based on the current view of the future development of the business environment and the future financial performance of the OP Corporate Bank Group and its various Company functions and actual results could differ materially from those indicated in the forward-looking statements.
Date of publication of the reports for 2020:
|Report of the OP Corporate Bank by the Board of Directors and annual financial statements for 2020||Week 10, 2021|
|Declaration on corporate governance of the OP Corporate Bank 2020||Week 10, 2021|
Timetable for interim reports and half-yearly financial report 2021:
|Interim report Q1 / 2021||April 28, 2021|
|Half-yearly financial report H1 / 2021||July 28, 2021|
|Interim report Q1-3 / 2021||October 27, 2021|
Helsinki, February 10, 2021
OP Corporate Bank plc
The board of directors
For more information, please contact:
Katja Keitaanniemi, President and CEO, tel. +358 (0) 10 252 1387
Tuuli Kousa, Chief Communications and Corporate Responsibility Officer, tel. +358 (0) 10 252 2957
Nasdaq Helsinki Oy
Euronext Dublin (Irish Stock Exchange)
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OP Corporate Bank plc is part of the OP Financial Group. The OP Corporate Bank and the OP Mortgage Bank are responsible for financing the money and capital markets through OP. Under applicable law, OP Corporate Bank, OP Mortgage Bank and their parent company OP Cooperative, as well as other credit institutions in the OP Financial Group, are ultimately jointly and severally liable for each other’s debts and obligations. The OP Corporate Bank acts as the central bank of the OP Financial Group.