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OP Corporate Bank plc’s Interim Report 1 January–31 March 2023

OP Corporate Bank plc
OP Corporate Bank plc

OP Corporate Bank plc
Interim Report 1 January–31 March 2023
Stock Exchange Release 3 May 2023 at 9.00am EEST

OP Corporate Bank plc’s Interim Report 1 January–31 March 2023

  • OP Corporate Bank plc’s operating profit (earnings before tax) increased to EUR 81 million (–17).

  • Net interest income increased by 35% to EUR 127 million (94). Investment income increased by EUR 24 million to EUR 31 million (7). Net commissions and fees increased by EUR 14 million to EUR 17 million (3).

  • Impairment loss on receivables decreased by EUR 32 million to EUR 11 million (42).

  • Operating expenses totalled EUR 94 million (91).

  • The loan portfolio grew by 2% year on year, to EUR 27.3 billion (26.7). The deposit portfolio decreased by 16% to EUR 12.4 billion (14.8).

  • The Corporate Banking and Capital Markets segment’s operating profit increased to EUR 33 million (–33). Net interest income grew by 33% to EUR 70 million (53). Investment income increased by EUR 20 million to EUR 18 million (–2) and net commissions and fees by EUR 14 million to EUR 1 million (–13). Operating expenses remained at the previous year’s level at EUR 44 million. Impairment loss on receivables totalled EUR 13 million (29).

  • The Asset and Sales Finance Services and Payment Transfers segment’s operating profit increased to EUR 39 million (17). Net interest income increased by 30% to EUR 51 million (40). Net commissions and fees, EUR 15 million, were at the previous year’s level. Operating expenses totalled EUR 36 million (32 million). Impairment loss on receivables reversed came to EUR 2 million. A year ago, impairment loss on receivables reduced earnings by EUR 11 million.

  • The Baltics segment’s operating profit rose to EUR 8 million (2). Net interest income increased by 37% to EUR 16 million (12). Net commissions and fees totalled EUR 2 million (3). Operating expenses remained at the previous year’s level at EUR 10 million. Impairment loss on receivables totalled EUR 1 million (3).

  • The Group Functions segment’s operating profit was EUR 1 million (–3). The financial position and liquidity remained strong.

  • OP Corporate Bank plc’s CET1 ratio was 13.1% (11.9), which exceeds the minimum regulatory requirement by 4.5 percentage points.

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OP Corporate Bank plc’s key indicators

Operating profit, € million

Q1/2023

Q1/2022

Change, %

Q1–4/2022

Corporate Banking and Capital Markets

33

-33

-

186

Asset and Sales Finance Services and Payment Transfers

39

17

134.9

138

Baltics

8

2

291.0

24

Group Functions

1

-3

-

-83

Total

81

-17

-

265

Total income

186

116

60.5

564

Total expenses

-94

-91

3.5

-281

Return on equity (ROE), %

6.0

-1.3

7.3*

4.9

Return on assets (ROA), %

0.44

-0.06

0.50*

0.22

 

31 Mar 2023

31 Mar 2022

Change, %

31 Dec 2022

CET1 ratio, %

13.1

15.3

-2.2*

11.9

Loan portfolio, € million**

27,312

26,679

2.4

28,309

Guarantee portfolio, € million

3,438

3,546

-3.0

3,412

Other exposures, € million

6,513

5,469

19.1

6,354

Deposits, € million

12,377

14,806

-16.4

14,683

Ratio of non-performing exposures to exposures, %**

1.9

2.0

-0.1*

1.5

Ratio of impairment loss on receivables to loan and guarantee portfolio, %**

0.14

0.56

-0.42*

0.06

Comparatives for the income statement are based on the corresponding figures a year ago. Unless otherwise specified, balance-sheet and other cross-sectional figures on 31 December 2022 are used as comparatives.
*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 sink into a moderate recession, inflation to decrease slowly. An exceptional degree of uncertainty is still associated with the business environment. 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 due to geopolitical risks and inflation relate 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 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 plc’s and its various functions, and actual results may differ materially from those expressed in the forward-looking statements.

Schedule for Interim Report and Half-year Financial Report in 2023:

Half-year Financial Report H1/2023

25 July 2023

Interim Report Q1-3/2023

25 October 2023

Helsinki, 3 May 2023

OP Corporate Bank plc
Board of Directors

For additional information, please contact

Katja Keitaanniemi, CEO, 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.