OP Corporate Bank plc's Financial Statements Bulletin for 1

OP Corporate Bank plc Stock Exchange Release 5 February 2019 at 9.00 am EET Financial Statements Bulletin

OP Corporate Bank plc's Financial Statements Bulletin for 1 January - 31 December 2018

• Consolidated earnings before tax were EUR 439 million (535). Return on equity was 8.5% (10.6). Return on assets was 0.54% (0.67).
• Net interest income rose by 2% to EUR 264 million and net insurance income by 19% to EUR 548 million, comparable change being -2%. Investment income fell by 46% to EUR 210 million.
• Expenses grew by 8% to EUR 611 million. OP Financial Group transferred the management of the majority of the personnel's statutory earnings-related pension insurance and the related portfolio to Ilmarinen Mutual Pension Insurance Company at the end of 2018. The transfer reduced OP Corporate Bank's pension costs and improved earnings before tax by EUR 34 million while improving its capital adequacy ratio by 0.1 percentage point.
• Impairment losses on receivables remained low, totalling EUR 13 million (12).
• The CET1 ratio was 15.1% (16.0), while the target is 15%.
• Banking earnings before tax increased by 3% to EUR 354 million. The loan portfolio increased by 11% to EUR 22.3 billion. The cost/income ratio was 31.6% (31.4).
• Non-life Insurance earnings before tax decreased by 41% to EUR 114 million due to a 174-million euro reduction in net investment income. The reduction in the discount rate for insurance liability increased claims incurred by EUR 102 million a year ago. The operating combined ratio was 92.0% (96.1).
• Other Operations earnings before tax were EUR -30 million (-2) due to lower net investment income. Liquidity and access to funding remained good.
• In 2019, the quality of the loan portfolio and demand for loans are expected to remain good and Non-life Insurance premium revenue is expected to remain at a healthy level. Estimates for full-year 2019 earnings will only be provided at the OP Financial Group level, in its financial statement bulletin and interim reports.

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 2017 are used as comparatives. On 1 January 2018, OP Corporate Bank adopted IFRS 9 Financial Instruments. Comparatives deriving from the income statement are based on figures under IAS 39 reported for the corresponding period in 2017. Unless otherwise specified, balance sheet and other cross-sectional figures under IAS 39 on 31 December 2017 are used as comparatives. *Change in ratio

*Excluding expenses of the health and wellbeing business and a non-recurring item recognised in earnings relating to the transfer of statutory earnings-related pension insurance.

Outlook for 2019 The financial-sector operating environment is quite favourable on the whole although the world economy is showing signs of slower growth. While low market interest rates are expected to slow down growth in banks' net interest income and erode insurance institutions' income from fixed income investments, they should also improve customers' repayment capacity. Impairment losses have been very low for a long time now. The most significant strategic risks in the financial sector are currently associated with changing customer behaviour, operating environment digitisation, competition from outside of the traditional financial sector and more complex regulation. Industry disruption is threatening to slow down growth and erode income generation in the years to come. Changes mean that financial sector players will be faced with an obvious requirement to improve customer and employee experience, enhance the agility of their operations and related development as well as improve productivity.

In 2019, the quality of the loan portfolio and demand for loans are expected to remain good and Non-life Insurance premium revenue is expected to remain at a healthy level. The most significant uncertainties affecting earnings relate to changes in the interest rate and investment environment, market growth rate, changes in the competitive situation, impairment loss on receivables and the effect of large claims on claims expenditure.

In 2019, full-year earnings estimates will only be provided at the OP Financial Group level, in its financial statement bulletin and interim reports.

All forward-looking statements in this Financial Statements Bulletin 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.     Financial reporting in 2019

OP Corporate Bank plc publishes the following financial information pursuant to the regular disclosure obligation of a securities issuer: Time of publication of 2018 reports:

Schedule for Interim Reports in 2019:                                                

Helsinki, 5 February 2019

OP Corporate Bank plc Board of Directors 

For additional information, please contact

Katja Keitaanniemi, President and CEO, tel. +358 (0)10 252 1387

Tuuli Kousa, Chief Communications Officer, tel. +358 (0)10 252 2957

DISTRIBUTION Nasdaq Helsinki Euronext Dublin (Irish Stock Exchange) LSE London Stock Exchange SIX Swiss Exchange Major media op.fi

OP Corporate Bank plc is part of 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.

Attachment

• OP Corporate Bank plc’s Financial Statements Bulletin 2018.pdf