As a responsible business, we have complied with the European Central Bank’s recommendation to limit profit distribution. Earlier this year, we stated that we would postpone the payment of interest on Profit Shares for 2020 until October 2021. On 23 July 2021, the European Central Bank announced that it would not extend its profit distribution recommendation beyond 30 September 2021.
We will pay interest on Profit Shares for 2020 to holders of those shares on Monday 4 October 2021. The interest payable for 2020 totalled EUR 95 million based on the original return target of 3.25 per cent.
About the payment of interest for 2021
We will therefore return to a normal profit distribution schedule for the payment of interest on Profit Shares. This involves paying interest for each year in June of the following year, if the distribution criteria are fulfilled. The return target for Profit Shares for 2021 is 3.25 per cent. The final amount of interest paid will be confirmed after the end of the financial year. We are one of Europe’s soundest banks in terms of capital adequacy and our June-end CET1 ratio was strong at 18.3 per cent.
OP cooperative bank’s Profit Share
Profit Shares are long-term equity contributions made by OP cooperative banks’ owner-customers to their local OP cooperative banks. A return target is set annually on Profit Shares. For 2020, this target was 3.25 per cent.