OP Corporate Bank plc's Financial Statements Bulletin for 1 January-31 December 2016

2. Februar 2017

OP Corporate Bank plc
Stock Exchange Release, 2 February 2017 at 9.00 am EET
Financial Statements Bulletin

OP Corporate Bank plc's Financial Statements Bulletin for 1 January-31 December 2016

• Consolidated earnings before tax were EUR 504 million (625). The return on equity was 10.4% (14.8).
• Banking earnings before tax decreased to EUR 260 million (334) due to lower net investment income. The loan portfolio grew in the financial year by 9.7% to EUR 18.0 billion (16.4). The operating cost/income ratio was 32.8% (27.4).
• Non-life Insurance earnings before tax decreased to EUR 231 million (267) due to lower net investment income. Operating combined ratio was 87.6% (87.3).
• Other Operations earnings before tax were EUR 13 million (23). Liquidity and access to funding remained good.
• The CET1 ratio was 14.9% (14.1), while the target was 15%.
• The financial targets were aligned with the OP 2016 strategy.
• Outlook for 2017: OP Corporate Bank Group's consolidated earnings before tax in 2017 are expected to be about the same as or lower than in 2016.

	Q1-4/2016	Q1-4/2015	Change, %
Earnings before tax, EUR million
Banking	260	334	-22.1
Non-life Insurance	231	267	-13.2
Other Operations	13	23	-44.5
Group total	504	625	-19.4

Comparatives deriving from the income statement are based on figures reported for continuing operations for the corresponding period a year ago. Unless otherwise specified, balance-sheet and other cross-sectional figures on 31 December 2015 are used as comparatives.

Financial targets	Q1-4/2016	Q1-4/2015	Target
Customer experience, NPS (-100-+100)	58		70, over time 90
Common Equity Tier 1 (CET1) ratio, %	14.9	14.1	15
Return on economic capital, %	17.0	21.6	22
Expenses of present-day business, EUR million	471	475	Expenses in 2019 lower than in 2015
Dividend payout ratio, %*	50.4	30	50

* Board proposal

Outlook for 2017

The Finnish economy recovered last year driven by consumer spending and construction in particular. Brexit, in particular, added uncertainty during 2016. The uncertainty remained, however, transient. Confidence indicators improved during the rest of the year. In Finland, consumer confidence in particular improved, which was helped by lower unemployment. The housing market picked up and home prices rose moderately. The world economy is expected to recover slightly, which together with pro-competitiveness measures should gradually support Finnish exports. The Finnish economy is expected to continue to grow at a relatively steady rate on a broader base than before. Political uncertainty in export markets and partly in Finland too will cast a shadow over the economic outlook.

Low market interest rates will erode banks' net interest income and weaken insurance institutions' investment income, but then again will support customers' repayment capacity. Impairment losses in the banking sector have been low despite the persistent slow economic growth. The financial sector's preparation for changing customer behaviour and challenges presented by digitisation will substantially increase the need for reinvention in the sector across the board. Industry disruption is threatening to erode income generation too in the years to come. Changes in the operating environment will emphasise the role of the management of operational efficiency, profitability and capital adequacy with a long-term approach.

OP Corporate Bank Group's consolidated earnings before tax in 2017 are expected to be about the same as or lower than in 2016. The most significant uncertainties affecting earnings relate to changes in the interest rate and investment environment, impairment loss on receivables, the rate of business growth and the effect of large claims on claims expenditure.

All forward-looking statements in this Financial Statement Bulletin expressing the management's expectations, beliefs, estimates, forecasts, projections and assumptions are based on the current view of the future development in the operating environment and the future financial performance of OP Corporate Bank Group and its various functions, and actual results may differ materially from those expressed in the forward-looking statements.

Helsinki, 2 February 2017

OP Corporate Bank plc
Board of Directors  

Financial reporting in 2017

OP Corporate Bank plc publishes the following financial information pursuant to the regular disclosure obligation of a securities issuer:

Schedule for Interim Reports in 2017:

Interim Report Q1/2017			27 April 2017
Interim Report H1/2017			2 August 2017
Interim Report Q1-3/2017			1 November 2017

DISTRIBUTION
NASDAQ Helsinki Ltd
London Stock Exchange
SIX Swiss Exchange
Major media
www.op.fi , www.pohjola.com

For additional information, please contact
Jouko Pölönen, President and CEO, tel. +358 (0)10 253 2691
Carina Geber-Teir, Executive Vice President, Corporate Communications, tel. +358 (0)10 252 8394

OP Corporate Bank is part of the leading Finnish customer-owned financial services group, 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's central bank.

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