OP Corporate Bank plc
Interim Report 1 January–31 March 2022
Stock Exchange Release 4 May 2022 at 9.00am EEST
OP Corporate Bank plc’s Interim Report 1 January–31 March 2022
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OP Corporate Bank plc’s earnings before tax were EUR –17 million (65). 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 116 million (150). Net investment income fell by 85% to EUR 7 million (49). Net interest income increased by 23% to EUR 94 million (77). Net commissions and fees decreased by EUR 10 million to EUR 3 million (13).
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Total expenses increased by 5% to EUR 91 million (87).
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Impairment loss recognised on receivables amounted to EUR 42 million. A year ago, impairment loss on receivables reversed came to EUR 2 million. A significant portion of the increase in impairment loss on receivables came from the indirect effects of the war in Ukraine.
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OP Corporate Bank has no significant direct exposures to Russia. The impacts of the war in Ukraine on credit risk exposure mainly arise indirectly from certain sectors, especially as a result of a rise in energy and raw material prices.
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The loan portfolio grew in the year to March by 9% to EUR 26.6 billion (24.4). In the year to March, the deposit portfolio increased by 11% to EUR 14.8 billion (13.4).
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The Corporate Banking and Capital Markets segment’s earnings before tax were EUR –33 million (65). Total income decreased by 63% to EUR 40 million (107). Net interest income rose to EUR 53 million (52). Net investment income fell by EUR 50 million to EUR –2 million (49). Total expenses increased by 16% to EUR 44 million (38). Higher total expenses were explained by a higher stability contribution paid to the Single Resolution Fund financed by the euro-area banks. Impairment loss on receivables increased to EUR 29 million (5).
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The Asset and Sales Finance Services and Payment Transfers segment’s earnings before tax were EUR 17 million (30). Total income increased by 6% to EUR 60 million (57). Net interest income increased by 6% to EUR 40 million (37) and net commissions and fees by 9% to EUR 15 million (14). Total expenses decreased to EUR 32 million (33). Impairment loss on receivables increased to EUR 11 million (–5).
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Baltic earnings before tax amounted to EUR 2 million (3). Total income increased to EUR 14 million (9). Net interest income increased to EUR 12 million (7) and net commissions and fees to EUR 3 million (2). Total expenses increased to EUR 10 million (6).
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Group Functions segment’s earnings before tax amounted to EUR –3 million (–33). Liquidity remained strong.
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OP Corporate Bank plc’s CET ratio was 15.3% (15.4), which exceeds the minimum regulatory requirement by 8.3 percentage points.
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OP Financial Group has decided to apply an RWA floor, based on the standardised approach, in the calculation of its capital adequacy ratio. Application of the floor is expected to decrease OP Corporate Bank’s CET1 ratio by no more than 3 percentage points in the second quarter of 2022.