OP Corporate Bank plc
Half-year Financial Report 1 January–30 June 2024
Stock Exchange Release 24 July 2024 at 9.00 am EEST
OP Corporate Bank plc's Half-year Financial Report 1 January–30 June 2024
- OP Corporate Bank plc's operating profit rose to EUR 218 million (171).
- Net interest income grew by 16% to EUR 306 million (263). Investment income fell by 54% to EUR 18 million (40). Net commissions and fees totalled EUR 38 million (40).
- Impairment loss on receivables decreased to EUR 16 million (23).
- Total operating expenses decreased by 11% to EUR 147 million (166). The cost/income ratio improved to 39% (46).
- In the year to June, the loan portfolio decreased by 0.3% to EUR 27.4 billion (27.4). The deposit portfolio increased by 26.6% in the year to June to EUR 14.7 billion (11.6).
- The Corporate Banking and Capital Markets operating profit increased to EUR 152 million (98). Net interest income grew by 28% to EUR 191 million (149). Investment income fell by 49% to EUR 15 million (29). Operating expenses decreased by 18% to EUR 60 million (73). Reversals of impairment loss on receivables amounted to EUR 1 million. A year ago, impairment loss on receivables totalled EUR 14 million.
- The Asset and Sales Finance Services and Payment Transfers segment's operating profit was EUR 72 million (71). Net interest income increased by 4% to EUR 107 million (103). Net commissions and fees totalled EUR 31 million (32). Operating expenses decreased by 6% to EUR 60 million (64). Impairment loss on receivables totalled EUR 17 million (8).
- The Baltics segment's operating profit amounted to EUR 19 million (19). Net interest income decreased to EUR 29 million (34). Net commissions and fees, EUR 5 million, were at the previous year's level. Operating expenses decreased by 11% to EUR 16 million (18).
- The Group Functions segment's operating loss was EUR -25 million. A year ago, the operating loss amounted to EUR -18 million. Financial position and liquidity remained strong.
- OP Corporate Bank plc's CET1 ratio was 14.1% (13.0), which exceeds the minimum regulatory requirement by 5.4 percentage points.
OP Corporate Bank plc’s key indicators
| Operating profit (loss), € million | H1/2024 | H1/2023 | Change, % | Q1–4/2023 |
| Corporate Banking and Capital Markets | 152 | 98 | 54.6 | 198 |
| Asset and Sales Finance Services and Payment Transfers | 72 | 71 | 0.8 | 126 |
| Baltics | 19 | 19 | -1.2 | 27 |
| Group Functions | -25 | -18 | 43.0 | -22 |
| Total | 218 | 171 | 27.1 | 329 |
| Total income | 380 | 360 | 5.7 | 738 |
| Total expenses | -147 | -166 | -11.5 | -313 |
| Cost/income ratio, % | 38.6 | 46.1 | -7.5 | 42.4 |
| Return on equity (ROE), % | 7.4 | 6.2 | 1.2* | 5.9 |
| Return on assets (ROA), % | 0.45 | 0.31 | 0.14* | 0.30 |
| 30 Jun 2024 | 30 Jun 2023 | Change, % | 31 Dec 2023 | |
| CET1 ratio, % | 14.1 | 13.3 | 0.8* | 13.0 |
| Loan portfolio, € million | 27,373 | 27,449 | -0.3 | 28,076 |
| Guarantee portfolio, € million | 2,813 | 2,990 | -5.9 | 3,184 |
| Other exposures, € million | 5,380 | 5,892 | -8.7 | 5,745 |
| Deposits, € million | 14,710 | 11,620 | 26.6 | 14,629 |
| Ratio of non-performing exposures to exposures, % | 2.2 | 1.7 | 0.5* | 2.2 |
| Ratio of impairment loss on receivables to loan and guarantee portfolio, % | 0.11 | 0.15 | -0.04* | 0.31 |
Comparatives for the income statement are based on the corresponding figures in 2023. Unless otherwise specified, figures from 31 December 2023 are used as comparatives for balance-sheet and other cross-sectional items.
* Change in ratio, percentage point(s).
Outlook for 2024
The Finnish economy was sluggish in the first half of 2024. GDP contracted over the previous year and unemployment increased. After spring, however, economic confidence has improved. Decelerating inflation and falling interest rates are paving the way for economic recovery. Risks associated with the economic outlook are still higher than usual. The escalation of geopolitical crises may abruptly affect capital markets and the economic environment.
A full-year earnings estimate for 2024 will only be provided at Group level in OP Financial Group's financial statements bulletin and interim and half-year financial reports.
The most significant uncertainties affecting OP Corporate Bank's earnings performance relate to developments in the business environment, changes in the interest rate and investment environment, and 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 2024:
| Interim Report Q1-3/2024 | 31 October 2024 |
Helsinki, 24 July 2024
OP Corporate Bank plc
Board of Directors
For additional information, please contact:
Katja Keitaanniemi, Chief Executive Officer, tel. +358 (0)10 252 1387
Lotta Ala-Kulju, Head of Corporate Communications, tel. +358 (0)10 252 8719
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.
