OP Corporate Bank plc's Half-year Financial Report 1 January–30 June 2024

OP Corporate Bank is part of the Finnish financial services leader OP Financial Group. In the first half of the year, the group earned EUR 2.4 billion in revenues, an 11% increase compared to the same period last year (EUR 2.164 billion). The group's operating profit amounted to EUR 1.229 billion, almost 25% higher than in the first half of last year (EUR 986 million).

Published31.7.2024, 12.42

OP Corporate Bank plc's operating profit rose to EUR 218 million (171).
Net interest income grew by 16% to EUR 306 million (263). Investment income fell by 54% to EUR 18 million (40). Net commissions and fees totalled EUR 38 million (40).
Impairment loss on receivables decreased to EUR 16 million (23).
Total operating expenses decreased by 11% to EUR 147 million (166). The cost/income ratio improved to 39% (46).
In the year to June, the loan portfolio decreased by 0.3% to EUR 27.4 billion (27.4). The deposit portfolio increased by 26.6% in the year to June to EUR 14.7 billion (11.6).
The Corporate Banking and Capital Markets operating profit increased to EUR 152 million (98). Net interest income grew by 28% to EUR 191 million (149). Investment income fell by 49% to EUR 15 million (29). Operating expenses decreased by 18% to EUR 60 million (73). Reversals of impairment loss on receivables amounted to EUR 1 million. A year ago, impairment loss on receivables totalled EUR 14 million.
The Asset and Sales Finance Services and Payment Transfers segment's operating profit was EUR 72 million (71). Net interest income increased by 4% to EUR 107 million (103). Net commissions and fees totalled EUR 31 million (32). Operating expenses decreased by 6% to EUR 60 million (64). Impairment loss on receivables totalled EUR 17 million (8).
The Baltics segment's operating profit amounted to EUR 19 million (19). Net interest income decreased to EUR 29 million (34). Net commissions and fees, EUR 5 million, were at the previous year's level. Operating expenses decreased by 11% to EUR 16 million (18).
The Group Functions segment's operating loss was EUR -25 million. A year ago, the operating loss amounted to EUR -18 million. Financial position and liquidity remained strong.
OP Corporate Bank plc's CET1 ratio was 14.1% (13.0), which exceeds the minimum regulatory requirement by 5.4 percentage points.

OP Corporate Bank plc’s key indicators

Operating profit (loss), € million	H1/2024	H1/2023	Change, %	Q1–4/2023
Corporate Banking and Capital Markets	152	98	54.6	198
Asset and Sales Finance Services and Payment Transfers	72	71	0.8	126
Baltics	19	19	-1.2	27
Group Functions	-25	-18	43.0	-22
Total	218	171	27.1	329
Total income	380	360	5.7	738
Total expenses	-147	-166	-11.5	-313
Cost/income ratio, %	38.6	46.1	-7.5	42.4
Return on equity (ROE), %	7.4	6.2	1.2*	5.9
Return on assets (ROA), %	0.45	0.31	0.14*	0.30
	30 Jun 2024	30 Jun 2023	Change, %	31 Dec 2023
CET1 ratio, %	14.1	13.3	0.8*	13.0
Loan portfolio, € million	27,373	27,449	-0.3	28,076
Guarantee portfolio, € million	2,813	2,990	-5.9	3,184
Other exposures, € million	5,380	5,892	-8.7	5,745
Deposits, € million	14,710	11,620	26.6	14,629
Ratio of non-performing exposures to exposures, %	2.2	1.7	0.5*	2.2
Ratio of impairment loss on receivables to loan and guarantee portfolio, %	0.11	0.15	-0.04*	0.31

Comparatives for the income statement are based on the corresponding figures in 2023. Unless otherwise specified, figures from 31 December 2023 are used as comparatives for balance-sheet and other cross-sectional items.
* Change in ratio, percentage point(s).

Outlook for 2024

The Finnish economy was sluggish in the first half of 2024. GDP contracted over the previous year and unemployment increased. After spring, however, economic confidence has improved. Decelerating inflation and falling interest rates are paving the way for economic recovery. Risks associated with the economic outlook are still higher than usual. The escalation of geopolitical crises may abruptly affect capital markets and the economic environment.

A full-year earnings estimate for 2024 will only be provided at Group level in OP Financial Group's financial statements bulletin and interim and half-year financial reports.

The most significant uncertainties affecting OP Corporate Bank's earnings performance relate to developments in the business environment, changes in the interest rate and investment environment, and developments in impairment loss on receivables. In addition, future earnings performance will be affected by the market growth rate and the change in the competitive situation.

Forward-looking statements in this Half-year Financial Report expressing the management's expectations, beliefs, estimates, forecasts, projections and assumptions are based on the current view of the future development in the business environment and the future financial performance of OP Corporate Bank plc's and its various functions, and actual results may differ materially from those expressed in the forward-looking statements.