OP Financial Group
Stock exchange release
2 November 2018 at 7.15pm EET
OP Financial Group's capital adequacy remains solid in the stress test by the European Banking Authority
OP Financial Group's capital adequacy remained solid in the stress test exercise conducted together by the European Banking Authority (EBA) and the European banking supervisors. The test measures EU-wide banking capital adequacy developments in stress scenarios.
- The stress test results showed that OP Financial Group is well prepared for economic crises. Enabled by our strong capital base, our performance will remain stable even in economic shocks. The success of our customers is important to us. We will continue to ensure the reliability of our operations in future too, states Timo Ritakallio, OP Financial Group's President and Group Executive Chair.
In the baseline scenario of the test under which the operating environment mainly remains unchanged, OP Financial Group's CET1 ratio will improve and be 21.3% in 2020. At the end of September 2018, OP Financial Group's CET1 ratio was 20.0%.
In an adverse scenario, earnings and capital adequacy will be burdened, for example, by lower net interest income caused by higher funding costs, as well as higher impairment losses. In this scenario, OP Financial Group's CET1 ratio will remain strong and be 15.3% in 2020.
Stress tests assess banks' capacity to withstand crises
Stress tests aim to provide supervisors, banks and other market participants with a common framework for assessing the status of the financial health of EU banks. The EU-wide stress test conducted in 2018 included 48 banks covering around 70% of the total banking assets in the EU. Of the 48 banks subject to the stress test, 33 are directly supervised by the ECB, OP Financial Group included.
The EBA has conducted stress tests since 2009, the previous one conducted in 2016. The stress tests have been conducted using the EBA's uniform methodology and simplified assumptions, and they cannot be used to predict future developments.
The EBA published the stress test results on its website on 2 November at 6.00pm CET. The tables available on the EBA's website present the results of OP Financial Group and other banks.
OP Communications, Saturday 3 November from 9am: tel. +358 50 523 9904
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OP Financial Group is Finland's largest financial services group whose mission is to create sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. OP Financial Group consists of 156 OP cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. The Group has a staff of 12,000 and 1.9 million owner-customers.
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.