OP Corporate Bank plc
Half-year Financial Report 1 January–30 June 2023
Stock Exchange Release 25 July 2023 at 9.00 am EEST
OP Corporate Bank plc’s Half-year Financial Report 1 January–30 June 2023
- OP Corporate Bank plc’s operating profit (earnings before tax) increased to EUR 171 million (28).
- Net interest income grew by 46% to EUR 263 million (181). Net commissions and fees increased by EUR 32 million to EUR 40 million (8) and investment income by EUR 26 million to EUR 40 million (14).
- Impairment loss on receivables decreased by EUR 17 million to EUR 23 million (40).
- Operating expenses totalled EUR 166 million (153).
- The loan portfolio, EUR 27.4 billion (27.5), was almost at the previous year’s level. In the year to June, the deposit portfolio decreased by 19% to EUR 11.6 billion (14.3).
- The Corporate Banking and Capital Markets segment’s operating profit increased to EUR 98 million (–6). Net interest income grew by 36% to EUR 149 million (109). Investment income increased by EUR 22 million to EUR 29 million (7) and net commissions and fees by EUR 31 million to EUR 5 million (–25). Operating expenses totalled EUR 73 million (71). Impairment loss on receivables totalled EUR 14 million (29).
- The Asset and Sales Finance Services and Payment Transfers segment’s operating profit increased to EUR 71 million (55). Net interest income grew by 27% to EUR 103 million (81). Net commissions and fees of EUR 32 million increased by EUR 2 million year on year. Operating expenses totalled EUR 64 million (57). Impairment loss on receivables totalled EUR 8 million (6).
- The Baltics segment’s operating profit rose to EUR 19 million (9). Net interest income grew by 37% to EUR 34 million (25). Net commissions and fees totalled EUR 5 million (6). Operating expenses of EUR 18 million rose by EUR 2 million year on year. Impairment loss on receivables totalled EUR 1 million (5).
- The Group Functions segment’s operating loss was EUR 18 million (–31). The financial position and liquidity remained strong.
- OP Corporate Bank plc’s CET1 ratio was 13.3% (11.9), which exceeds the minimum regulatory requirement by 4.6 percentage points.
OP Corporate Bank plc’s key indicators
| Operating profit (loss), € million | H1/2023 | H1/2022 | Change, % | Q1–4/2022 |
| Corporate Banking and Capital Markets | 98 | -6 | - | 186 |
| Asset and Sales Finance Services and Payment Transfers | 71 | 55 | 28.6 | 138 |
| Baltics | 19 | 9 | 109.7 | 24 |
| Group Functions | -18 | -31 | - | -83 |
| Total | 171 | 28 | 519.8 | 265 |
| Total income | 360 | 221 | 63.2 | 564 |
| Total expenses | -166 | -153 | 8.5 | -281 |
| Return on equity (ROE), % | 6,2 | 1,1 | 5,1* | 4,9 |
| Return on assets (ROA), % | 0.31 | 0.05 | 0.26* | 0.22 |
| 30 Jun 2023 | 30 Jun 2022 | Change, % | 31 Dec 2022 | |
| CET1 ratio, % | 13.3 | 12.4 | 0.9* | 11.9 |
| Loan portfolio, € million** | 27,449 | 27,537 | -0.3 | 28,309 |
| Guarantee portfolio, € million | 2,990 | 3,457 | -13.5 | 3,412 |
| Other exposures, € million | 5,892 | 5,921 | -0.5 | 6,354 |
| Deposits, € million | 11,620 | 14,298 | -18.7 | 14,683 |
| Ratio of non-performing exposures to exposures, %** | 1.7 | 1.9 | -0.2* | 1.5 |
| Ratio of impairment loss on receivables to loan and guarantee portfolio, %** | 0.15 | 0.26 | -0.11* | 0.06 |
Comparatives for the income statement are based on the corresponding figures a year ago. Unless otherwise specified, figures from 31 December 2022 are used as comparatives for balance-sheet and other cross-sectional items.
*Change in ratio.
**The formula for calculating key figures and ratios has been changed as of the beginning of 2023. The item excludes changes in the fair value of loans in hedge accounting as of 1 January 2023. Comparatives have been adjusted to correspond to the current definition.
Outlook towards the year end
The economy is expected to enter a mild recession and inflation to fall slowly. An exceptional degree of uncertainty is still associated with the business environment. Rising interest rates are weakening the real estate market and construction sector in particular. Developments in global capital markets together with the geopolitical situation may abruptly affect the business environment.
Full-year earnings estimates for 2023 will only be provided at the OP Financial Group level, in its financial statements bulletin and interim and half-year financial reports.
The most significant uncertainties affecting OP Corporate Bank’s earnings performance to developments in the business environment, changes in the interest rate and investment environment and to the developments in impairment loss on receivables. In addition, future earnings performance will be affected by the market growth rate and the change in the competitive situation.
Forward-looking statements in this Half-year Financial 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 plc’s and its various functions, and actual results may differ materially from those expressed in the forward-looking statements.
Schedule for Interim Report in 2023:
| Interim Report Q1-3/2023 | 25 October 2023 |
Helsinki, 25 July 2023
OP Corporate Bank plc
Board of Directors
For additional information, please contact
Katja Keitaanniemi, Chief Executive Officer, tel. +358 (0)10 252 1387
Anni Hiekkanen, Chief Communications Officer, tel. +358 (0)10 252 1989
DISTRIBUTION
Nasdaq Helsinki Oy
Euronext Dublin (Irish Stock Exchange)
LSE London Stock 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 Financial Group's central bank.
