Earnings before tax over one billion euros for the third year in a row, strong growth in business
Earnings before tax amounted to 1,077 million euros (1,138), being 5% lower than the record earnings a year ago.
Income increased by a total of 4%. Net interest income increased by 3%, net commissions and fees by 8% and net investment income by 27%. Net insurance income decreased by 14%.
Expenses rose by 13%. The rise in expenses stemmed mainly from higher development investments related to the modernisation of the present-day business and from an increase in other expenses related to strategy implementation.
Impairment loss on receivables, 48 million euros (77), were low, accounting only for 0.06% of loans and receivables.
CET1 ratio was 20.1%, or at the previous year-end level.
Banking: The loan portfolio increased by 5% and deposits by 6%. Both net interest income and net commissions and fees increased by 4%. Supported by strong growth in income, earnings before tax increased by 16%.
Non-life insurance: Insurance premiums from private customers increased by 2%, while those from corporate customers decreased slightly. Earnings before tax decreased by 14%. The earnings were eroded by a reduction of the discount rate to 1.5% in September and more unfavourable claims development than a year ago.
Wealth Management: Assets under management increased by 5%. Earnings before tax increased by 9%, aided by strong improvement in net commissions and fees. Business development and sense of community for the benefit of owner-customers
Other Operations: Earnings were weakened by higher investments in the development of services and other strategy implementation.
Earnings before tax for 2018 are expected to be at about the same level as or lower than in 2017.
Business development and sense of community for the benefit of owner-customers
In 2017, development investments worth around 450 million euros focused on ensuring compliance with requirements set by the authorities and legislative requirements, improving operational efficiency and smoothness as well as developing business.
In 2017, OP Financial Group opened Pohjola Hospitals in Oulu and Kuopio. The construction of a hospital in Turku is progressing as planned.
In the financial year, the number of OP cooperative banks’ owner-customers increased by 86,000 to over 1.8 million and that of OP Financial Group’s joint banking and insurance customers by 40,000 to almost 1.8 million.
In November, OP held the biggest electronic voting in Finland. Almost 2,400 owner-customers were elected to Representative Assemblies in 81 OP cooperative banks for the next four years.
OP Financial Group had the objective of donating 100 person-years of volunteering in honour of the centenary of Finland’s independence. Volunteer work performed with partners totalled 274 years.
OP bonuses increased by 6% to 220 million euros (208).