Pohjola Bank plc Financial Statements Bulletin for 1 January-31 December 2015

Pohjola Bank plc
Stock Exchange Release, 4 February 2016 at 09.00 am EET
Financial Statements Bulletin for January 1-31 December 2015

Pohjola Bank plc Financial Statements Bulletin for 1 January-31 December 2015

• Consolidated earnings before tax were EUR 652 million (584) and consolidated earnings before tax at fair value amounted to EUR 511 million (663). The return on equity was 14.8% (14.3).
• The Common Equity Tier 1 (CET1) ratio was 14.1% (12.4) as against the target of 15%.
• Earnings reported by Banking improved by 10% to EUR 334 million (303). The loan portfolio grew in the year to December by 10% to EUR 16.4 billion (14.9). Earnings included EUR 29 million (25) in impairment loss on receivables.
• Non-life Insurance earnings rose by 19% to EUR 267 million (223). Operating combined ratio was 87.3 (89.4). Return on investments at fair value was 2.3% (6.7).
• Other Operations earnings improved by 14% to EUR 23 million (20). Liquidity and access to funding remained good.
• Wealth Management earnings amounted to EUR 28 million (38). Assets under management increased in the year to December by 9%, totalling EUR 47 billion (43).
• In the partial demerger of Pohjola Bank plc, wealth management, card and property management operations presented as discontinued operations were transferred to OP Cooperative on 30 December 2015.
• Outlook for 2016: Consolidated earnings before tax for 2016 are expected to be lower than earnings from continuing operations in 2015. For more detailed information on the outlook, see "Outlook for 2016" below.

The above figures describe Pohjola Group as a whole without the division into continuing and discontinued operations.
Comparatives deriving from the income statement are based on figures reported for the corresponding period a year ago. Unless otherwise specified, balance-sheet and other cross-sectional figures on 31 December 2014 are used as comparatives.

* Operating ratios exclude changes in reserving bases and amortisation on intangible assets arising from the corporate acquisition.
** The comparative figure has been adjusted to correspond to the change in the discount rate applied since the beginning of 2015
*** Excluding the effect of transitional provisions.
**** The expense target for 2012 has been adjusted to correspond to the change in the accounting policies applied as of 1 January 2015 (see Note 1. Accounting policies).
***** Board proposal

The world economy is expected to grow at a rate below the average. Economic growth in the euro area is anticipated to remain moderate. Finnish economic growth has been modest for a long time now. Weak export demand, eroding price competitiveness and slow reform of economic structures are threatening to make the Finnish economic growth rate clearly lag behind the euro area for several years. Implementing the structural reforms may tighten the political situation, which may, for its part, threaten the recovery of the domestic market. The current exceptional world economic situation with low interest rates and quantitative easing measures by central banks will also cause major uncertainty to the future economic development.

The weak Finnish economy will keep long-term growth expectations low in the financial sector. Low interest rates will erode banks' net interest income and weaken insurance institutions' investment income. Then again, low interest rates support customers' loan repayment capacity that has remained stable despite the prolonged period of slow growth. Capital adequacy and profitability in the financial sector have come to play an ever-increasing role because of the unstable operating environment and the tighter regulatory framework.

Pohjola Group's consolidated earnings before tax in 2016 are expected to be lower than earnings from continuing operations before tax in 2015. The most significant uncertainties affecting earnings in 2016 relate to the rate of business growth, impairment loss on receivables, developments in bond and capital markets, the effect of large claims on claims expenditure and to the discount rate applied to insurance liabilities.

All forward-looking statements in this report 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 Pohjola Group and its various functions, and actual results may differ materially from those expressed in the forward-looking statements.

Helsinki, 4 February 2016

Pohjola Bank plc
Board of Directors

This Interim Report is available at www.pohjola.com > Media > Releases.

Financial reporting in 2016

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

Schedule for Interim Reports in 2016:

Interim Report Q1/2016                               27 April 2016
Interim Report H1/2016                               3 August 2016
Interim Report Q1-3/2016                            2 November 2016

DISTRIBUTION


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

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

Pohjola is part of the leading Finnish customer-owned financial services group, OP Financial Group. It provides its customers with banking, non-life insurance and asset management services. Pohjola acts as OP's central bank and is responsible, together with OP Mortgage Bank, for OP's funding in money and capital markets. As laid down in the applicable law, Pohjola, its 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. The joint liability within OP Financial Group is based on the Finnish Act on the Amalgamation of Deposit Banks Act.


www.pohjola.com