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OP Financial Group

OP Financial Group ("Group") is the largest financial services group in Finland, offering banking, non-life insurance and wealth management services for over four million customers.

The Group began its operations in its present form as the amalgamation of the Member Cooperative Banks as provided for in the Act on Cooperative Banks and Other Credit Institutions in the Form of a Cooperative (laki osuuspankeista ja muista osuuskuntamuotoisista luottolaitoksista 1504/2001)("Cooperative Bank Act") in 1997.

In accordance with the Act on Deposit Bank Amalgamations (Laki talletuspankkien yhteenliittymästä 599/2010) (the "Amalgamations Act"), OP Financial Group comprises: (a) OP Cooperative as OP Financial Group's central institution; (b) the companies belonging to the consolidation groups of OP Cooperative; and (c) the Member Credit Institutions of OP Cooperative, which consist of OP Corporate Bank plc as the central bank of OP Financial Group, OP Mortgage Bank (OP-Asuntoluottopankki Oyj in Finnish), Helsinki Area Cooperative Bank, OP Card Company Plc and 142 member cooperative banks (together the "Member Credit Institutions"). The Group is supervised on a consolidated basis. The Member Credit Institutions and the Central Cooperative are liable for each other's debts and commitments.

The member cooperative banks are independent, local deposit banks that are engaged in retail banking. OP Cooperative is the Group's strategic owner institution, which is owned by the member cooperative banks. As a central institution, it is in charge of Group steering and control. Product and service development as well as support functions have been centralised in OP Cooperative's subsidiary OP-Services Ltd.


OP Financial Group comprises OP Cooperative and its subsidiaries such as OP Corporate Bank plc, OP Mortgage Bank and OP Life Assurance Company Ltd as well as 142 OP member cooperative banks. OP Financial Group is the leading financial services group in Finland and it has over four million customers.

OP Financial Group seeks funding in the international markets through its issuing entities, OP Corporate Bank plc and OP Mortgage Bank.

OP Financial Group's segment structure

OP Financial Group's company structure (incl. OP Cooperative's main subsidiaries)

OP Cooperative and the member credit institutions are liable for each other's debts and commitments. OP Financial Group's credit institution activities are monitored on a consolidated basis and directly supervised by the ECB.

Under the Act on the Amalgamation of Deposit Banks (Laki talletuspankkien yhteenliittymästä 599/2010), OP Cooperative and the member credit institutions are jointly liable for each others’ debts.

The member credit institutions include OP Corporate Bank plc, Helsinki Area Cooperative Bank, OP Mortgage Bank, OP Card Company Plc and the member cooperative banks. Insurance companies or other group entities do not fall within the scope of joint liability.

  • If a creditor has not received payment from a member credit institution on a due debt, the creditor may demand payment from OP Cooperative.
  • The member credit institutions must pay proportionate shares of the amount OP Cooperative has paid, and upon insolvency of OP Cooperative they have an unlimited liability to pay the debts of OP Cooperative.
  • OP Cooperative and the member credit institutions are under an obligation to take support actions to prevent a member credit institution’s liquidation.

Further information on the joint liability available in the Base Prospectuses of OP Corporate Bank plc and OP Mortgage Bank.


OP Financial Group's Interim Report Q1/2020


Earnings before tax EUR 129 million – income from customer business increased, changes in investment income and impairment loss weakened earnings

  • Earnings before tax amounted to EUR 129 million (194).

  • Income from customer business increased: net interest income increased by 9% to EUR 319 million (294), net insurance income by 21% to EUR 131 million (109) and net commissions and fees by 4% to EUR 244 million (234).

  • The Vallila property was sold on 31 January 2020. OP Financial Group recognised a capital gain of EUR 96 million on the sale. OP Financial Group will continue operating in the property under a long-term lease agreement.

  • The effects of the coronavirus pandemic (COVID-19) on capital market developments weakened investment income. Investment income fell by 88% year on year, to EUR 11 million (90).

  • Total income decreased by 16% to EUR 662 million (790) (including the overlay approach, income increased by 11%).

  • Total expenses rose by 12% to EUR 518 million (465) due to higher ICT costs, ICT depreciation and amortisation and charges of financial authorities.

  • Impairment loss on receivables totalled EUR 105 million (11). Impairment loss on receivables was especially increased by the adoption of the new definition of default and the effects of the coronavirus pandemic on credit risk outlook.

  • In the year to March, OP Financial Group’s loan portfolio grew by 6% to EUR 93 billion (88) and deposits by 3% to EUR 65 billion (63). 

  • The CET1 ratio was 17.7% (19.5). The lower ratio was affected by the adoption of the new definition of default and the increase in the loan portfolio.

  • Retail Banking earnings before tax fell by 85% to EUR 8 million (49). Net interest income increased by EUR 2 million, net commissions and fees by EUR 1 million and net investment income by EUR 14 million. Impairment loss on receivables, EUR 57 million, increased by EUR 49 million year on year. The loan portfolio increased by 4% and deposits by 6% in the year to March.

  • Corporate Banking earnings before tax fell by 76% to EUR 14 million (56). Net interest income increased by 12% and net commissions and fees by 24%. Net investment income fell by 29%. The lower net investment income is explained by changes in Credit Valuation Adjustment (CVA) in derivatives owing to market changes. Impairment loss on receivables, EUR 47 million, increased by EUR 42 million year on year. The loan portfolio grew by 8% in the year to March.

  • Insurance earnings before tax decreased by 33% to EUR 59 million (88). Net insurance income rose by 18% to EUR 138 million (117). Investment income decreased by EUR 51 million to EUR 21 million. The operating combined ratio was 92.7% (97.5).

  • Other Operations earnings before tax were EUR 57 million (5). The sale of the Vallila property improved earnings by EUR 96 million.

  • In January–March, OP Financial Group invested a total of EUR 82 million (74) in business development and improving customer experience.

  • New OP bonuses accrued to owner-customers totalled EUR 65 million (69).

  • The number of owner-customers in OP cooperative banks totalled 2.0 million. The number of OP Financial Group’s joint banking and insurance customers totalled 1.3 million.

  • In its stock exchange release on 21 April 2020, OP Financial Group weakened its earnings outlook for 2020: Earnings before tax for 2020 are expected to be lower than those for 2019 (previously at the same level). For more detailed information on the outlook, see 'Outlook towards the year end' in the Interim Report.

  • On 27 April 2020, OP Cooperative’s Board of Directors decided that OP Financial Group’s long-term strategic target for the CET1 ratio be at least the CET1 capital adequacy requirement plus four percentage points. The CET1 target calculated by applying the March-end capital adequacy requirement was 14.9%. At the end of June, the target is estimated to be 13.9%.

Comments by President and Group Executive Chair Timo Ritakallio

Our customer business developed favourably in January–March. Our net interest income, net insurance income and net commissions and fees increased clearly year on year. Overall, OP Financial Group’s income from customer business reached a record high level. Meanwhile, investment income fell sharply due to the weak development of the bond and equity markets. During the first quarter, the coronavirus crisis had a major impact on bond and equity markets.

Over the last 12 months, OP Financial Group’s loan portfolio grew by 6% to EUR 93 billion. During the same period, the deposit portfolio grew by 3% to EUR 65 billion.

OP Financial Group's expenses increased by 12% year on year. This increase resulted mainly from higher ICT and development costs, regulation-related costs and personnel costs. Our ICT costs for 2020 will be further increased by a one-off investment in the IT infrastructure.

Impairment loss on receivables increased to EUR 105 million. This was attributable in particular to regulatory changes. In addition, the effects of the coronavirus pandemic on the credit risk outlook increased the impairment loss on receivables.

OP Financial Group’s earnings before tax for January–March amounted to EUR 129 million, which was EUR 66 million lower than a year earlier. Earnings were reduced in particular by higher impairment loss on receivables and the steep decline in investment income.

The exceptional uncertainty caused by the coronavirus pandemic weakens OP Financial Group’s investment income and credit risk outlook. OP Financial Group’s earnings before tax for 2020 are expected to be lower than in 2019. Despite the coronavirus pandemic, OP Financial Group’s capital adequacy is at a solid level. In addition, our funding position and liquidity are good. In March, our CET1 ratio was 17.7%.

We have taken several measures to support Finnish businesses and households in getting through the financial problems caused by the pandemic. We have offered repayment holidays for home loans and SMEs’ corporate loans, free of charge, to those customers whose finances have been affected by the pandemic. We have received a total of 92,000 applications from private and corporate customers and have adopted robotics to speed up their processing. The robots preprocess applications and make and implement decisions. We are investigating the use of robotics to tackle even other challenges arising from the coronavirus.

OP cooperative banks provide separate service hours for people who need special support, and we have also opened a telephone helpline to support them in using our services during the coronavirus pandemic. We also implement our corporate responsibility by participating in an initiative to increase the coronavirus testing capacity and by donating the contribution of Pohjola Hospital staff to tasks that are critical to our society. 

To ensure the health and safety of our personnel, we have made various efforts to provide safe working conditions in our offices and branches. We also encourage those whose tasks allow it to work from home as much as possible. Through these measures, we have ensured that our services that are critical to society are available despite the coronavirus crisis.

The coronavirus pandemic has derailed the global economy. Economic statistics cannot keep up with the current pace of change, and we cannot do much more than draw up scenarios of the future. We are facing extreme uncertainty in all respects.

The atmosphere is tense in the international financial market. However, the banking sector is now in a better shape than during the financial crisis of 2008, and prompt and extensive measures taken by central banks have helped to stabilise the market. This time, the financial market is not at the centre stage of the crisis.

Economic recovery depends first and foremost on the duration of restrictions implemented due to the exceptional situation caused by the coronavirus pandemic. The decisions that the Finnish Government will take in the next few months will have a major impact on our national economy, households and businesses for many years to come.