OP Corporate Bank plc
Interim Report 1 January–30 September 2020
Stock Exchange Release 22 October 2020 at 9.00 am EEST

OP Corporate Bank plc’s Interim Report for 1 January–30 September 2020

• Consolidated earnings before tax were EUR 319 million (331). Net insurance income increased by 16% to EUR 463 million (399) and net interest income by 16% to EUR 244 million (211). Impairment loss on receivables, EUR 65 million, increased by EUR 54 million year on year. Investment income fell by 22% to EUR 137 million (176). The Group’s total income decreased by 2% to EUR 838 million (854), but including the overlay approach, income increased by 7% to EUR 860 million (806).

• Corporate Banking earnings before tax decreased by 3% to EUR 194 million (201). Net investment income increased by 46% to EUR 104 million (71) and net interest income by 6% to EUR 298 million (281). Corporate Banking earnings were weakened by an increase of EUR 55 million in impairment loss to EUR 66 million (11). The loan portfolio grew in the year to September by 4% to EUR 24.6 billion (23.7).

• Insurance earnings before tax rose by 2% to EUR 169 million (166). Net insurance income increased by 16% to EUR 463 million (399). Investment income fell by 74% to EUR 21 million (80). The operating combined ratio was 86.0% (91.8).

• Other Operations earnings before tax were EUR –43 million (–36). Liquidity remained good despite the COVID-19 crisis.

• The Group's CET1 ratio was 14.6% (14.9).

Comparatives deriving from the income statement are based on figures reported for the corresponding periods a year ago. Unless otherwise specified, balance-sheet and other cross-sectional figures on 31 December 2019 are used as comparatives.
*Change in ratio

Outlook towards the year end

During the third quarter, the world economy began to recover from the collapse experienced in spring. However, the recovery was uneven with GDP clearly below last year’s level almost everywhere in the world. In autumn, the number of COVID-19 infections rebounded but so far the consequences have been less severe than in spring. The financial market has remained calm, partly due to major support from central banks. Interest rates are exceptionally low throughout.

A gradual recovery of the economy is expected to continue if the COVID-19 pandemic remains reasonably under control. However, the outlook is still uncertain both in the domestic and the export market. A sudden worsening of the pandemic would affect OP Corporate Bank in three ways: economic uncertainty and uncertainty in the financial and capital market would increase, a rise in financial difficulties among customers would increase credit risk and decrease the demand for services, and a worsening disease situation could make it more difficult for OP Financial Group to run its operations efficiently.

The most significant uncertainties affecting earnings performance due to the COVID-19 crisis relate to changes in the interest rate and investment environment and to the developments in impairment losses. In addition, future earnings performance will be affected by the market growth rate, change in the competitive situation and the effect of large claims on claims expenditure.

In 2020, full-year earnings estimates will only be provided at the OP Financial Group level, in its financial statements bulletin and interim reports.

All forward-looking statements in this Interim Report expressing the management's expectations, beliefs, estimates, forecasts, projections and assumptions are based on the current view of the future development in the business 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.

Time of publication of 2020 reports:

Schedule for Financial Statements Bulletin 2020 and Interim Reports and Half-year Financial Report in 2021:

Helsinki, 22 October 2020

OP Corporate Bank plc
Board of Directors

For additional 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

DISTRIBUTION
Nasdaq Helsinki Oy
Euronext Dublin (Irish Stock Exchange)
LSE London Stock Exchange
SIX Swiss Exchange
Major media
op.fi

OP Corporate Bank plc is part of 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.