OP Corporate Bank plc
Half-year Financial Report 1 January–30 June 2022
Stock Exchange Release 27 July 2022 at 9.00 EEST
OP Corporate Bank plc’s Half-year Financial Report for 1 January–30 June 2022
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OP Corporate Bank plc’s earnings before tax were EUR 28 million (142). Earnings were reduced in particular by lower net investment income and higher impairment loss on receivables.
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Total income decreased by 22% to EUR 221 million (284). Net investment income fell by 86% to EUR 14 million (96). Net interest income increased by 20% to EUR 181 million (150). Net commissions and fees decreased by EUR 13 million to EUR 8 million (21).
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Total expenses of EUR 153 million were at the previous year’s level.
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Impairment loss recognised on receivables amounted to EUR 40 million. A year ago, impairment loss on receivables reversed came to EUR 12 million. A significant portion of the increase in impairment loss on receivables came from the indirect effects of the war in Ukraine in the first quarter.
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OP Corporate Bank has no significant direct exposures to Russia.
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The loan portfolio grew in the year to June by 10% to EUR 27.4 billion (24.9). The deposit portfolio decreased by 2% to EUR 14.3 billion (14.5).
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The Corporate Banking and Capital Markets segment’s earnings before tax were EUR –6 million (152). Total income decreased by 54% to EUR 94 million (206). Net interest income increased by 3% to EUR 109 million (106). Net investment income fell by EUR 88 million to EUR 7 million (95). Total expenses increased by 4% to EUR 71 million (68). Impairment loss on receivables increased to EUR 29 million. A year ago, impairment loss on receivables reversed came to EUR 15 million.
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The Asset and Sales Finance Services and Payment Transfers segment’s earnings before tax were EUR 55 million (52). Total income increased by 6% to EUR 119 million (111). Net interest income increased by 6% to EUR 81 million (76) and net commissions and fees by 9% to EUR 30 million (28). Total expenses increased by 4% to EUR 57 million (55). Impairment loss on receivables increased to EUR 6 million (4).
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Baltic earnings before tax amounted to EUR 9 million (7). Total income increased to EUR 30 million (17). Net interest income increased to EUR 25 million (14) and net commissions and fees to EUR 6 million (4). Total expenses increased to EUR 16 million (11).
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The Group Functions segment’s earnings before tax amounted to EUR –31 million (–69). Liquidity remained strong.
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OP Corporate Bank plc’s CET1 ratio was 12.4% (15.4), which exceeds the minimum regulatory requirement by 5.4 percentage points.
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OP Financial Group adopted an RWA floor, based on the Standardised Approach, in the calculation of its capital adequacy ratio. Application of the floor decreased OP Corporate Bank’s CET1 ratio by 2.4 percentage points in the second quarter.
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On 26 July 2022, OP Cooperative’s Board of Directors decided to file a pre-application with the European Central Bank (ECB) on the use of the Standardised Approach in capital adequacy calculation, instead of the internal models (IRBA) and the currently applied risk-weighted assets floor based on the Standardised Approach. A possible transfer to the Standardised Approach will not affect OP Corporate Bank’s capital adequacy or risk exposure.