OP Corporate Bank plc's Interim Report for 1 Janua

OP Corporate Bank plc Interim Report for 1 January-30 September 2017 1 November 2017 at 9.00 am EET

OP Corporate Bank plc's Interim Report for 1 January-30 September 2017

• Consolidated earnings before tax were EUR 392 million (400). The return on equity was 10.4% (11.1).
• Banking earnings before tax increased to EUR 256 million (189) due to higher net investment income and net interest income. The loan portfolio increased in the year to September by 11.0% to EUR 19.4 billion. The cost/income ratio was 30.8% (34.6).
• Non-life Insurance earnings before tax decreased to EUR 125 million (199). Bringing forward the plan to reduce the discount rate as well as unfavourable claims development during the first three quarters weakened net insurance income and the operating combined ratio, which was 97.0% (86.5). Net return on investments at fair value totalled EUR 119 million (18).
• Other Operations earnings before tax were EUR 11 million (11). Liquidity and access to funding remained good.
• The CET1 ratio was 14.5% (14.9), while the target is 15%.
• Timo Ritakallio, LL.M., MBA and D.Sc. (Tech.), has been appointed OP Financial Group's new President and Group Executive Chairman. Following the appointment, he will become Chair of the Board of Directors of OP Corporate Bank. He will take up his duties in March 2018.
• Change in the outlook: OP Corporate Bank Group's consolidated earnings before tax are expected to be about the same as (previously: about the same as or lower than) in 2016.

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 2016 are used as comparatives.

*Excluding expenses of the health and wellbeing business

Outlook towards the year end

The world economy showed favourable development during the third quarter. The euro-area economy has grown at a brisker pace than expected, but the inflation rate has remained moderate and the interest rate outlook has remained low. The Finnish economy continued to grow strongly and on a broad basis. Economic sentiment is still improving. Improvement in employment will support consumer confidence and better business profitability will increase fixed investments. Favourable economic development is expected to continue in the near future. Geopolitical risks,in particular, are casting a shadow over the outlook. In Finland, the risk is that a longer-term economic growth will remain modest if adequate reforms that support an increase in the employment rate cannot be implemented.

The financial sector has adjusted rather well to the new type of low interest rate environment. While low interest rates have retarded growth in banks' net interest income and eroded insurance institutions' income from fixed income investments, they also have improved customers' repayment capacity. Impairment losses have remained low despite the slow growth that has lasted for several years now. The most significant strategic risks in the financial sector are currently associated with changing customer behaviour, operating environment digitisation and more complex regulation. Industry disruption is threatening to slow down growth and erode income generation in the years to come. In the next few years, the financial sector will be faced with a strong need to reinvent itself. Changes in the operating environment will emphasise the necessity of reinvention with a long-term approach as well as the role of the management of profitability and capital adequacy.

OP Corporate Bank Group's consolidated earnings before tax are expected to be about the same as (previously: 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 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 OP Corporate Bank Group and its various functions, and actual results may differ materially from those expressed in the forward-looking statements.

Helsinki, 1 November 2017

OP Corporate Bank plc Board of Directors

Financial reporting in 2018

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

Schedule for Financial Statements Bulletin for 2017 and Interim Reports in 2018: Financial Statements Bulletin 2017               8 February 2018 Interim Report Q1/2018                               3 May 2018 Interim Report H1/2018                                1 August 2018 Interim Report Q1-3/2018                            31 October 2018

DISTRIBUTION Nasdaq Helsinki Ltd London Stock Exchange SIX Swiss Exchange Major media 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

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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