Po­hjola Bank is­sues third quar­ter earn­ings re­port

The Pak Banker - - Front Page -


Po­hjola Bank Plc is­su­ing 3Q in­terim re­port said its con­sol­i­dated earn­ings be­fore tax came to EUR 282 mil­lion (245) and con­sol­i­dated earn­ings be­fore tax at fair value amounted to EUR 606 mil­lion (65). Re­turn on eq­uity at fair value stood at 25.0% (2.5). Core Tier 1 ra­tio im­proved to 10.7%.

Earn­ings be­fore tax recorded by Bank­ing im­proved to EUR 163 mil­lion ( 135). These in­cluded EUR 34 mil­lion (36) in im­pair­ment charges for re­ceiv­ables. The loan port­fo­lio in­creased by 7% from its level on 31 De­cem­ber 2011. The av­er­age cor­po­rate loan port­fo­lio mar­gin stood at 1.48% (1.34). Within Non-life In­sur­ance, in­sur­ance pre­mium rev­enue rose by 9%. The com­bined ra­tio was 97.1% (91.5).

Ex­clud­ing the changes in re­serv­ing bases and amor­ti­sa­tion on in­tan­gi­ble as­sets aris­ing from com­pany ac­qui­si­tion, the oper­at­ing com­bined ra­tio stood at 89.0% (89.4). Re­turn on in­vest­ments at fair value was 8.6% (-1.8).

Earn­ings be­fore tax posted by As­set Man­age­ment amounted to EUR 17 mil­lion (19) and as­sets un­der man­age­ment were EUR 32.0 bil­lion (31.3) at the end of the re­port­ing pe­riod. Po­hjola ini­ti­ated a re­or­gan­i­sa­tion pro­gramme with the aim of achiev­ing an­nual cost sav­ings of around EUR 50 mil­lion by the end of 2015.

Po­hjola re­vised its fi­nan­cial tar­gets when it adopted its updated strat­egy. More de­tailed in­for­ma­tion on the fi­nan­cial tar­gets can be found in "Events af­ter the bal­ance sheet date" in in­terim re­port.

Out­look to­wards the year end: Con­sol­i­dated earn­ings be­fore tax for 2012 are expected to be sub- stan­tially higher than in 2011. It is es­ti­mated that the Non- life In­sur­ance com­bined ra­tio will vary be­tween 89% and 92% (pre­vi­ous es­ti­mate: 89- 94%). For more de­tailed in­for­ma­tion on out­look, see "Out­look to­wards the year end" be­low.

Con­sol­i­dated earn­ings be­fore tax were EUR 79 mil­lion (47). A re­duc­tion in the dis­count rate for tech­ni­cal pro­vi­sions re­lated to pen­sion li­a­bil­i­ties eroded earn­ings by EUR 52 mil­lion while high­erthan- usual re­alised in­vest­ment in­come im­proved earn­ings.

Con­sol­i­dated earn­ings be­fore tax at fair value came to EUR 173 mil­lion (-101) and re­turn on eq­uity at fair value stood at 20.4% (13.6). Earn­ings be­fore tax recorded by Bank­ing to­talled EUR 42 mil­lion (43).

These in­cluded EUR 15 mil­lion (1) in im­pair­ment charges on re­ceiv­ables. The loan port­fo­lio in­creased by 1% and the av­er­age mar­gin of the cor­po­rate loan port­fo­lio rose by 5 ba­sis points.

Within Non- life In­sur­ance, in­sur­ance pre­mium rev­enue rose by 11%. The com­bined ra­tio stood at 101.8% (87.2) while the oper­at­ing com­bined ra­tio was 82.3% (85.2). Re­turn on in­vest­ments at fair value was 3.0% (2.8).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 2011 are used as com­par­a­tives. Pres­i­dent and CEO Mikael Sil­ven­noinen said our busi­ness at op­er­a­tional level made good progress dur­ing the third quar­ter. We con­tin­ued to strengthen our po­si­tion among cus­tomers. Non­life In­sur­ance ex­pe­ri­enced a record growth in the num­ber of loyal cus­tomer house­holds in Jan­uary-Septem­ber.

Within Bank­ing, the loan port­fo­lio con­tin­ued to grow but not as fast as in the pre­vi­ous two quar­ters. The av­er­age cor­po­rate loan mar­gin rose to 1.48% at the end of Septem­ber. In­sur­ance pre­mium rev­enue con­tin­ued to in­crease strongly and Non-life In­sur­ance showed good oper­at­ing prof­itabil­ity. Within As­set Man­age­ment, as­sets un­der man­age­ment re­bounded dur­ing the third quar­ter in the wake of favourable mar­ket developments.

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