OP Financial Group's Interim Report for 1 January - 31 March 2018
OP Financial Group's Interim Report for 1 January - 31 March 2018: Earnings before tax EUR 239 million - full-year earnings will be lower than a year ago
Earnings before tax amounted to EUR 239 million (283).
Income from customer business showed strong growth. Net interest income increased by 8%, net insurance income by 9% and net commissions and fees by 3%.
Investment income decreased by EUR 26 million. The decrease was affected by IFRS 9 adopted at the beginning of the year.
Development investments increased expenses that were 10% higher than a year ago.
Impairment loss on receivables, EUR 4 million (8), were very low due to recovery of impairments.
CET1 ratio was 20.0%, or at the previous year-end level.
Banking earnings before tax increased to EUR 184 million (163). Net interest income increased by 2% and net commissions and fees decreased by 2%. Expenses rose by 5%. The loan portfolio increased by 4.5% and deposits by 8.5% in the year to March.
Non-life Insurance earnings before tax decreased to EUR 38 million (49). Insurance premium revenue increased by 2% and expenses by 7%.
Wealth Management earnings before tax increased to EUR 47 million (34). Net commissions and fees were at the previous year's level. Expenses declined by 2% year on year. Assets under management increased by 1% in the year to March.
Other Operations earnings before tax were EUR -31 million (38). Earnings were eroded by higher expenses arising from development investments. A significant non-recurring item was included in income a year ago.
Timo Ritakallio, LL.M., MBA and D.Sc. (Tech.), took up his duties as OP Financial Group's new President and Group Executive Chair on 1 March 2018.
In its stock exchange release on 24 April 2018, OP Financial Group weakened its earnings outlook for 2018: Earnings before tax for 2018 are expected to be lower than those for 2017 (previously at the same level or lower). "Outlook towards the year end" describes the change in greater detail.