Today on 2 Feb. 2017 at 3 pm, OP Financial Group received information on the ECB's decision on raising the risk weights for certain OP Financial Group's asset classes for a fixed period

2. Februar 2017

OP Corporate Bank plc
OP Cooperative
Stock Exchange Release
2 February 2017 at 8.45 pm

Today on 2 Feb. 2017 at 3 pm, OP Financial Group received information on the ECB's decision on raising the risk weights for certain OP Financial Group's asset classes for a fixed period

This afternoon OP Financial Group was informed of the European Central Bank's (ECB) decision to raise OP Financial Group's risk weights for retail exposures for a fixed period of 18 months.

The shortcomings observed by the ECB in the IRBA (Internal Ratings Based Approach) validation process applied by OP Financial Group in capital adequacy measurement, especially delayed validations, lie behind this raise.

In its interim report for the second quarter of 2016, OP Financial Group informed for the first time of the ECB's investigation underway. Based on the Financial Statements Bulletin published today, OP Financial Group expected the decision to be disclosed during the first quarter of 2017.

As a result of the rise in risk weights, OP Financial Group's CET1 ratio will decrease by less than two percentage points. At the end of December 2016, OP Financial Group's CET1 ratio stood at 20.1%.

- We take this seriously. We have already remedied the shortcomings observed by the ECB to a substantial extent and will complete the corrective measures as soon as possible. It is worth noting that, despite our shortcomings in the issue related to the process raised by the ECB, the capital ratios we have published have given a true picture of OP Financial Group's financial position, states Harri Luhtala , CFO, OP Financial Group.

- Even after the rise in the risk weights, our capital adequacy is on a very solid basis. We still seek to achieve our capital adequacy target of 22% until the end of 2019. The rise in risk weights will have no effect on our customers or business, continues Luhtala.

- In our view, the ECB's decision means that the national increase planned by the Finnish Financial Supervisory Authority in the minimum risk weight of home loans would no longer reduce OP Financial Group's capital ratio. In our Financial Statements Bulletin, we estimated that the effect of the abovementioned minimum on our capital ratio is -0.9 percentage points, states Luhtala.

Under supervision by the Finnish Financial Supervisory Authority, OP Financial Group adopted IRBA for credit risk between 2008 and 2011. The ECB has supervised OP Financial Group since November 2014.

OP Corporate Bank plc
OP Cooperative
Carina Geber-Teir
Executive Vice President, Corporate Communications

For more information, please contact:
Harri Luhtala, CFO
Any requests for interviews via OP Communications, tel. +358 (0)50 523 9904, viestinta@op.fi

Distribution
Nasdaq Helsinki
LSE London Stock Exchange
SIX Swiss Exchange
Major media
op.fi and pohjola.com

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 about 170 member cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. The Group has a staff of 12,000 and some 1.7 million owner-customers and 4.3 million customers. www.op.fi

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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