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OP Mortgage Bank (70ZM)

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Wednesday 02 November, 2011

OP Mortgage Bank

OP Mortgage Bank : 3rd Quarter Results






OP Mortgage Bank
Interim Report for January-September 2011
2 November 2011, 9.00 am EET

INTERIM REPORT FOR 1 JANUARY - 30 SEPTEMBER 2011

OP Mortgage Bank's (OPA) loan portfolio increased to EUR 7,395 million in the
January-September period (EUR 5,008 million at the end of 2010). The bank
increased its loan portfolio in March, in June and in September when it
purchased housing loans from OP-Pohjola Group member cooperative banks. OPA
launched a covered bond issue at a nominal valued of  EUR 1 billion in April and
a covered bond issue at a nominal valued of  EUR 1 billion in July.

Earnings Development

+-----------------------------+----------+----------+-------+-------+------+
|EUR thousand                 |Q1-Q3/2011|Q1-Q3/2010|Q3/2011|Q3/2010|  2010|
+-----------------------------+----------+----------+-------+-------+------+
|                             |          |          |       |       |      |
+-----------------------------+----------+----------+-------+-------+------+
|Income                       |          |          |       |       |      |
+-----------------------------+----------+----------+-------+-------+------+
|Net interest income          |    18,587|    11,773|  6,716|  3,730|16,350|
+-----------------------------+----------+----------+-------+-------+------+
|Net commissions and fees     |    -7,342|    -6,394| -2,756| -2,054|-8,450|
+-----------------------------+----------+----------+-------+-------+------+
|Net income from trading      |         0|        -1|      0|      0|    -1|
+-----------------------------+----------+----------+-------+-------+------+
|Net income from investments  |       487|         1|    486|       |     2|
+-----------------------------+----------+----------+-------+-------+------+
|Other operating income       |         5|         8|      1|       |    19|
+-----------------------------+----------+----------+-------+-------+------+
|Total                        |    11,737|     5,387|  4,447|  1,676| 7,920|
+-----------------------------+----------+----------+-------+-------+------+
|                             |          |          |       |       |      |
+-----------------------------+----------+----------+-------+-------+------+
|Expenses                     |          |          |       |       |      |
+-----------------------------+----------+----------+-------+-------+------+
|Personnel costs              |       211|       222|     59|     62|   288|
+-----------------------------+----------+----------+-------+-------+------+
|Other administrative expenses|     1,567|     1,022|    521|    310| 1,396|
+-----------------------------+----------+----------+-------+-------+------+
|Other operating expenses     |     1,105|       974|    375|    396| 1,398|
+-----------------------------+----------+----------+-------+-------+------+
|Total                        |     2,883|     2,218|    955|    768| 3,082|
+-----------------------------+----------+----------+-------+-------+------+
|                             |          |          |       |       |      |
+-----------------------------+----------+----------+-------+-------+------+
|Earnings before tax          |     8,853|     3,169|  3,492|    908| 4,838|
+-----------------------------+----------+----------+-------+-------+------+


The net interest income for January-September totalled EUR 18,587 thousand
(11,773)[1]. Earnings before tax amounted to EUR 8,853 thousand (3,169).
Increase in net interest income was due to the growth in the loan portfolio.

Net commissions and fees were negative with commission income increasing to EUR
2,623 thousand (2,011) and commission expenses to EUR 9,966 thousand (8,406).
 Commission expenses mainly comprise commissions paid to OP-Pohjola Group member
banks for servicing housing loans. The bank's expenses amounted to EUR 2,883
thousand (2,218). Growth in expenses derived largely from the ICT-services and
the professional services purchased in connection with the new covered bond
issue. OPA did not recognise any loan losses for the first nine months.

Net interest income for July-September grew to EUR 6,716 thousand (3,730) and
earnings before taxes to EUR 3,492 thousand (908). The bank's expenses grew to
EUR 955 thousand (768).

Balance Sheet and Off-balance Sheet Commitments

OPA's balance sheet total amounted to EUR 7,743 million on 30 September (EUR
5,191 million) [2].

Change in Major Asset and Liability Items

+-------------------+-----------+-----------+-----------+-----------+----------+
|                   |           |  30 June  | 31 March  |           |  30 Sep  |
|EUR Million        |30 Sep 2011|   2011    |   2011    |31 Dec 2010|   2010   |
+-------------------+-----------+-----------+-----------+-----------+----------+
|                   |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Balance Sheet      |   7,743   |   6,820   |   6,948   |   5,191   |  4,418   |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Receivables from   |   7,395   |   6,643   |   6,713   |   5,008   |  4,213   |
|customers          |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Receivables from   |           |           |           |           |          |
|financial          |    93     |    89     |    119    |    62     |    48    |
|institutions       |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Debt securities    |           |           |           |           |          |
|issued to the      |   5,389   |   4,246   |   3,217   |   3,287   |  3,330   |
|public             |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Liabilities to     |           |           |           |           |          |
|financial          |   1,980   |   2,245   |   3,350   |   1,640   |   840    |
|institutions       |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Shareholders'      |    215    |    213    |    211    |    159    |   143    |
|equity             |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+
|Off-balance sheet  |     5     |     7     |     8     |     7     |    9     |
|commitments        |           |           |           |           |          |
+-------------------+-----------+-----------+-----------+-----------+----------+

The loan portfolio increased from EUR 5,008 million on 31 December 2010 to EUR
7,395 million on 30 September 2011. OPA increased its loan portfolio in the
review period when it purchased housing loans from OP-Pohjola-Group member banks
for EUR 3,254 million.

On 30 September, households accounted for 99 % (99) of the loan portfolio and
housing corporations for 1 % (1). The bank's non-performing loans amounted to
EUR 1.6 million (1.4).
No impairment losses on loans were recognised.

The carrying amount of bonds issued to the public totalled EUR 5,389 million
(3,287) on 30 September. OPA issued its sixth covered bond at a nominal value of
EUR 1 billion on international capital markets in June. Moody's Investor
Services and Standard & Poor's Rating Services have given the bond their highest
credit ratings of Aaa and AAA. In addition to bonds, other funding was based on
financing loans granted by Pohjola Bank plc (Pohjola). On 30 September,
financing loans totalled EUR 1,980 million (1,640).

Shareholders' equity rose to EUR 215 million (159). Retained earnings amounted
to
EUR 20.3 million (13.8) at the end of the review period.

OPA has hedged against the interest-rate risk associated with its housing loan
portfolio through interest-rate swaps, i.e. base rate cash flows from housing
loans to be hedged are swapped to short-term Euribor cash flows. OPA has also
swapped the fixed interest rates of the bonds it has issued to short-term
variable rates. OPA's interest-rate derivative portfolio totalled EUR 14,284
million (9,622). All derivative contracts have been concluded for hedging
purposes. Pohjola is the counterparty to all derivative contracts.

Development of Capital Adequacy

OPA's capital adequacy ratio stood at 8.7 % on 30 September. Shareholder's
equity increased by EUR 50 million in March when OP-Pohjola Group Central
Cooperative made an additional investment in OPA. OPA has calculated its capital
adequacy in compliance with Basel II. Credit risk and the capital requirement
for operational risk are calculated according to the standardised approach.

+--------------------------------------------+-----------+---------+-----------+
|OWN FUNDS, EUR thousand                     |           | 31 Dec  |           |
|                                            |30 Sep 2011|  2010   |30 Sep 2010|
+--------------------------------------------+-----------+---------+-----------+
|Tier I                                      |    214,506|  157,669|    142,635|
+--------------------------------------------+-----------+---------+-----------+
|     of which capital loans                 |           |         |           |
+--------------------------------------------+-----------+---------+-----------+
|Tier II                                     |     20,000|   20,000|     20,000|
+--------------------------------------------+-----------+---------+-----------+
|Decreases                                   |           |         |           |
+--------------------------------------------+-----------+---------+-----------+
|Total                                       |    234,506|  177,669|    162,635|
+--------------------------------------------+-----------+---------+-----------+
|                                            |           |         |           |
+--------------------------------------------+-----------+---------+-----------+
|Risk-weighted receivables, investments and  |           |         |           |
|off-balance sheet commitments               |  2,699,561|1,836,279|  1,556,949|
+--------------------------------------------+-----------+---------+-----------+
|                                            |           |         |           |
+--------------------------------------------+-----------+---------+-----------+
|Capital adequacy ratio, %                   |        8,7|      9,7|       10,4|
+--------------------------------------------+-----------+---------+-----------+
|                                            |           |         |           |
+--------------------------------------------+-----------+---------+-----------+
|Tier I ratio to risk-weighted receivables,  |           |         |           |
|investments and off-balance sheet           |           |         |           |
|commitments                                 |        7,9|      8,6|        9,1|
+--------------------------------------------+-----------+---------+-----------+

The increase in shareholders' equity arising from the measurement of pension
liabilities and the assets covering them, under IFRS, is not considered own
funds. Furthermore, intangible assets was also deducted from own funds.

+--------------------------------------------+-----------+---------+-----------+
|Risk-weighted receivables, investments and  |           | 31 Dec  |           |
|off balance-sheet commitments,  EUR thousand|30 Sep 2011|  2010   |30 Sep 2010|
+--------------------------------------------+-----------+---------+-----------+
|                                            |           |         |           |
+--------------------------------------------+-----------+---------+-----------+
| Receivables and investments                |  2,687,418|1,824,798|  1,543,476|
+--------------------------------------------+-----------+---------+-----------+
|  Off-balance-sheet items                   |      1,653|    2,748|      2,621|
+--------------------------------------------+-----------+---------+-----------+
| Market risk                                |          -|        -|          -|
+--------------------------------------------+-----------+---------+-----------+
| Operational risks                          |     10,490|    8,733|     10,852|
+--------------------------------------------+-----------+---------+-----------+
|                                            |           |         |           |
|Risk-weighted receivables, investments and  |           |         |           |
|off balance-sheet commitments, total        |  2,699,561|1,836,279|  1,556,949|
+--------------------------------------------+-----------+---------+-----------+

The increase in the amount of risk-weighted receivables was due to a decreased
loan portfolio.

Joint Responsibility and Joint Security

Under the Act on Cooperative Banks and Other Cooperative Credit Institutions,
the
amalgamation of the cooperative banks comprises the organisation's central
institution
(OP-Pohjola Group Central Cooperative), the Central Cooperative's member credit
institutions and the companies belonging to their consolidation groups. This
amalgamation is monitored on a consolidated basis. The Central Cooperative and
its
member banks are ultimately responsible for each other's liabilities and
commitments.

The Central Cooperative's members at the end of the report period comprised
OP-Pohjola Group's 208 member banks as well as Pohjola Bank plc, Helsinki OP
Bank Plc, OP Mortgage Bank and OP-Kotipankki Oyj. OP-Pohjola Group's insurance
companies do not fall within the scope of joint responsibility.

The central institution is obligated to provide its member credit institutions
with instructions on their internal supervision and risk management, their
operations in securing liquidity and capital adequacy, and compliance with
uniform accounting principles in preparing the coalition's consolidated
financial statements.

The central institution and its member credit institutions are jointly
responsible for the liabilities of the central institution or a member credit
institution placed in liquidation or bankruptcy that cannot be paid from its
assets. The liability is divided between the central institution and the member
credit institutions in ratios following the balance sheet total.

In spite of the joint responsibility and the joint security, pursuant to Section
25 of the Act on Mortgage Credit Banks, the holder of a bond with mortgage
collateral shall, notwithstanding the liquidation or bankruptcy of a mortgage
credit bank, have the right to receive payment, before other claims, for the
entire loan period of the bond, in accordance with the contract terms, from the
funds entered as collateral for the bond.


Personnel

On 30 September, OPA had five employees.  It purchases all key support services
from Central Cooperative and its Group companies, which reduces the need for
more staff.

Administration

The Annual General Meeting held in March confirmed the composition of the new
Board of Directors. Mr. Mika Helin, Executive Vice President, Hämeenlinnan
Seudun Osuuspankki and
Ms. Elina Ronkanen-Minogue, Senior Vice President, OP-Pohjola Group Central
Cooperative were elected as new members of the Board of Directors. Mr. Jari
Himanen, Senior Vice President, OP-Pohjola Group Central Cooperative and Matti
Nykänen, Senior Vice President, OP-Pohjola Group Central Cooperative were left
out of the Board of Directors. The Board composition is as follows:

+-------------+----------------------+-----------------------------------------+
|Chairman     |Harri Luhtala         |Chief Financial Officer, OP-Pohjola      |
|             |                      |Group Central Cooperative                |
+-------------+----------------------+-----------------------------------------+
|Vice Chairman|Elina Ronkanen-Minogue|Senior Vice President, OP-Pohjola        |
|             |                      |Group Central Cooperative                |
+-------------+----------------------+-----------------------------------------+
|Members      |Sakari Haapakoski     |Bank Manager, Oulun Osuuspankki          |
+-------------+----------------------+-----------------------------------------+
|             |Mika Helin            |Executive Vice President, Hämeenlinnan   |
|             |                      |Seudun Osuuspankki                       |
+-------------+----------------------+-----------------------------------------+
|             |Hanno Hirvinen        |Executive Vice President, Pohjola Bank   |
|             |                      |plc                                      |
+-------------+----------------------+-----------------------------------------+
|             |Heikki Kananen        |Managing Director, Mäntsälän Osuuspankki |
+-------------+----------------------+-----------------------------------------+
|             |Mikko Hyttinen        |Bank Manager, OP-Pohjola Group           |
|             |                      |Central Cooperative                      |
+-------------+----------------------+-----------------------------------------+
|             |Mikko Rosenlund       |Managing Director, Tampereen Seudun      |
|             |                      |Osuuspankki                              |
+-------------+----------------------+-----------------------------------------+

Managing Director: Lauri Iloniemi.

Events after the review period

Shareholders' equity increased in October by EUR 40 million after OP-Pohjola
Group Central Cooperative made an additional investment in the company. This
investment will strengthen the OPA's capital adequacy ratio.

OPA will calculate its capital adequacy in compliance with IRBA beginning the
31th of December 2011. IRBA relates a transition period during which the amount
of own funds will have a minimum requirement based on Basel1 rules (80% capital
floor). These rules decreases temporarily OPA's capital adequacy ratio. The
implementation of IRBA will increase OPA's capital adequacy ratio after the
transition period.

Prospects for the rest of the year

The overall quality of OPA's credit portfolio is expected to remain strong.
Earnings before tax in 2011 are expected to exceed the 2010 figure.

Income Statement

+-----------------------------+----------+----------+-------+-------+------+
|EUR thousand                 |Q1-Q3/2011|Q1-Q3/2010|Q3/2011|Q3/2010|  2010|
+-----------------------------+----------+----------+-------+-------+------+
|                             |          |          |       |       |      |
+-----------------------------+----------+----------+-------+-------+------+
|Interest income              |    93,309|    43,907| 39,555| 15,736|63,314|
+-----------------------------+----------+----------+-------+-------+------+
|Interest expenses            |    74,722|    32,134| 32,839| 12,006|46,963|
+-----------------------------+----------+----------+-------+-------+------+
|Net interest income          |    18,587|    11,773|  6,716|  3,730|16,350|
+-----------------------------+----------+----------+-------+-------+------+
|Net commissions and fees     |    -7,342|    -6,394| -2,756| -2,054|-8,450|
+-----------------------------+----------+----------+-------+-------+------+
|Net income from trading      |         0|        -1|      0|      0|    -1|
+-----------------------------+----------+----------+-------+-------+------+
|Net income from investments  |       487|         1|    486|      -|     2|
+-----------------------------+----------+----------+-------+-------+------+
|Other operating income       |         5|         8|      1|      -|    19|
+-----------------------------+----------+----------+-------+-------+------+
|Personnel costs              |       211|       222|     59|     62|   288|
+-----------------------------+----------+----------+-------+-------+------+
|Other administrative expenses|     1,567|     1,022|    521|    310| 1,396|
+-----------------------------+----------+----------+-------+-------+------+
|Other operative expenses     |     1,105|       974|    375|    396| 1,398|
+-----------------------------+----------+----------+-------+-------+------+
|Earnings before tax          |     8,853|     3,169|  3,492|    908| 4,839|
+-----------------------------+----------+----------+-------+-------+------+
|Income taxes                 |     2,303|       759|    909|    170| 1,264|
+-----------------------------+----------+----------+-------+-------+------+
|Profit for the period        |     6,550|     2,410|  2,583|    739| 3,574|
+-----------------------------+----------+----------+-------+-------+------+

Key Ratios

+-------------------------+----------+----------+-------+-------+----+
|                         |Q1-Q3/2011|Q1-Q3/2010|Q3/2011|Q3/2010|2010|
+-------------------------+----------+----------+-------+-------+----+
|Return on equity (ROE), %|       4.7|       2.3|    4.8|    2.1| 2.4|
+-------------------------+----------+----------+-------+-------+----+
|Cost/income ratio, %     |        25|        41|     21|     46|  39|
+-------------------------+----------+----------+-------+-------+----+


Calculation of key ratios

Return on equity, % = Annualised profit for the period / Equity capital (average
equity capital at the beginning and end of the period) × 100

Cost/income ratio, % = (Personnel costs + Other administrative expenses + Other
operating expenses) / (Net interest income + Net commission income + Net income
from trading + Total net income from investments + Other operating income) × 100

Risk exposure

The most significant types of risk related to OPA are credit risk, liquidity
risk and interest-rate risk. The indicators in use shows that OPA's credit risk
exposure is stable. The limit for liquidity risk set by the Board of Directors
has not been exceeded. The liquidity buffer for OP-Pohjola Group, managed by
Pohjola Bank plc, is exploitable by OPA.  OPA has hedged against the interest-
rate risk associated with its housing loan portfolio through interest-rate
swaps, i.e. base rate cash flows from housing loans to be hedged are swapped to
short-term Euribor cash flows. OPA has also swapped the fixed interest rates of
the bonds it has issued to short-term variable rates. The interest-rate risk may
be considered to be low.

Balance Sheet

+-----------------+---------+------------+-------------+-----------+-----------+
|                 | 30 Sep  |            |             |           |           |
|EUR thousand     |  2011   |30 June 2011|31 March 2011|31 Dec 2010|30 Sep 2010|
+-----------------+---------+------------+-------------+-----------+-----------+
|                 |         |            |             |           |           |
+-----------------+---------+------------+-------------+-----------+-----------+
|Receivables from |         |            |             |           |           |
|financial        |         |            |             |           |           |
|institutions     |   93,075|      88,525|      119,032|     61,673|     48,373|
+-----------------+---------+------------+-------------+-----------+-----------+
|Derivative       |         |            |             |           |           |
|contracts        |  165,305|      43,341|       37,975|     71,255|     95,897|
+-----------------+---------+------------+-------------+-----------+-----------+
|Receivables from |         |            |             |           |           |
|customers        |7,394,937|   6,643,067|    6,712,586|  5,008,381|  4,212,596|
+-----------------+---------+------------+-------------+-----------+-----------+
|Investments      |         |            |             |           |           |
|assets           |       17|          17|           17|         17|         17|
+-----------------+---------+------------+-------------+-----------+-----------+
|Intangible assets|      661|         745|          829|        914|        954|
+-----------------+---------+------------+-------------+-----------+-----------+
|Tangible assets  |        -|           2|            3|          3|          4|
+-----------------+---------+------------+-------------+-----------+-----------+
|Other assets     |   88,788|      43,850|       77,383|     48,790|     59,985|
+-----------------+---------+------------+-------------+-----------+-----------+
|Tax receivables  |         |            |             |           |           |
+-----------------+---------+------------+-------------+-----------+-----------+
|Total assets     |7,742,783|   6,819,547|    6,947,825|  5,191,034|  4,417,826|
+-----------------+---------+------------+-------------+-----------+-----------+
|                 |         |            |             |           |           |
+-----------------+---------+------------+-------------+-----------+-----------+
|Liabilities to   |         |            |             |           |           |
|financial        |         |            |             |           |           |
|institutions     |1,980,000|   2,245,000|    3,350,000|  1,640,000|    840,000|
+-----------------+---------+------------+-------------+-----------+-----------+
|Derivative       |         |            |             |           |           |
|contracts        |    6,233|      28,770|       53,286|     21,835|      5,417|
+-----------------+---------+------------+-------------+-----------+-----------+
|Debt securities  |         |            |             |           |           |
|issued to the    |         |            |             |           |           |
|public           |5,388,949|   4,246,175|    3,216,903|  3,286,747|  3,329,640|
+-----------------+---------+------------+-------------+-----------+-----------+
|Reserves and     |         |            |             |           |           |
|other liabilities|  130,591|      65,824|       96,381|     63,311|     80,000|
+-----------------+---------+------------+-------------+-----------+-----------+
|Tax liabilities  |    1,661|       1,013|          699|        342|        135|
+-----------------+---------+------------+-------------+-----------+-----------+
|Subordinated debt|         |            |             |           |           |
|securities       |   20,000|      20,000|       20,000|     20,000|     20,000|
+-----------------+---------+------------+-------------+-----------+-----------+
|Total liabilities|7,527,435|   6,606,782|    6,737,269|  5,032,235|  4,275,192|
+-----------------+---------+------------+-------------+-----------+-----------+
|Shareholders'    |         |            |             |           |           |
|equity           |         |            |             |           |           |
+-----------------+---------+------------+-------------+-----------+-----------+
|  Share capital  |   60,000|      60,000|       60,000|     60,000|     60,000|
+-----------------+---------+------------+-------------+-----------+-----------+
|  Reserve for    |         |            |             |           |           |
|invested         |         |            |             |           |           |
|unrestricted     |         |            |             |           |           |
|equity           |  135,000|     135,000|      135,000|     85,000|     70,000|
+-----------------+---------+------------+-------------+-----------+-----------+
|  Retained       |         |            |             |           |           |
|earnings         |   20,349|      17,765|       15,557|     13,799|     12,635|
+-----------------+---------+------------+-------------+-----------+-----------+
|Total equity     |  215,349|     212,765|      210,557|    158,799|    142,635|
+-----------------+---------+------------+-------------+-----------+-----------+
|Total liabilities|         |            |             |           |           |
|and shareholders'|         |            |             |           |           |
|equity           |7,742,783|   6,819,547|    6,947,825|  5,191,034|  4,417,826|
+-----------------+---------+------------+-------------+-----------+-----------+

Off-balance Sheet Commitments
+--------------------+-----------+------------+-------------+-----------+------+
|                    |           |            |             |           |30 Sep|
|EUR thousand        |30 Sep 2011|30 June 2011|31 March 2011|31 Dec 2010| 2010 |
+--------------------+-----------+------------+-------------+-----------+------+
|Binding credit      |           |            |             |           |      |
|commitments         |      4,597|       6,700|        7,676|      7,456| 8,820|
+--------------------+-----------+------------+-------------+-----------+------+

Statement of Changes in Equity

+--------------------+-------------+--------------+---------------+------------+
|                    |             |Other reserves|       Retained|            |
|EUR thousand        |Share capital|              |       earnings|Total equity|
+--------------------+-------------+--------------+---------------+------------+
|Shareholders' equity|             |              |               |            |
|1 Jan 2010          |       60,000|        70,000|         10,224|     140,224|
+--------------------+-------------+--------------+---------------+------------+
|Reserve for invested|             |              |               |            |
|unrestricted  equity|            -|             -|              -|           -|
+--------------------+-------------+--------------+---------------+------------+
|Profit for the      |             |              |               |            |
|period              |            -|             -|          2,410|       2,410|
+--------------------+-------------+--------------+---------------+------------+
|Other changes       |            -|             -|              -|           -|
+--------------------+-------------+--------------+---------------+------------+
|Shareholders' equity|             |              |               |            |
|30 Sep 2010         |       60,000|        70,000|         12,635|     142,635|
+--------------------+-------------+--------------+---------------+------------+
|                    |             |              |               |            |
+--------------------+-------------+--------------+---------------+------------+
|                    |             |              |Retained       |            |
|EUR thousand        |Share capital|Other reserves|earnings       |Total equity|
+--------------------+-------------+--------------+---------------+------------+
|Shareholders' equity|             |              |               |            |
|1 Jan 2011          |       60,000|        85,000|         13,799|     158,799|
+--------------------+-------------+--------------+---------------+------------+
|Reserve for invested|             |              |               |            |
|unrestricted equity |            -|        50,000|              -|      50,000|
+--------------------+-------------+--------------+---------------+------------+
|Profit for the      |             |              |               |            |
|period              |            -|             -|          6,550|       6,550|
+--------------------+-------------+--------------+---------------+------------+
|Other changes       |            -|             -|              -|           -|
+--------------------+-------------+--------------+---------------+------------+
|Shareholders' equity|             |              |               |            |
|30 Sep 2011         |       60,000|       135,000|         20,349|     215,349|
+--------------------+-------------+--------------+---------------+------------+

Cash Flow Statement

+----------------------------+-----------+-----------+
| EUR thousand               | Q1-3/2011 | Q1-3/2010 |
+----------------------------+-----------+-----------+
|                            |           |           |
+----------------------------+-----------+-----------+
| Liquid assets 1 January    |    61,673 |    41,129 |
+----------------------------+-----------+-----------+
| Cash flow from operations  | 2,008,222 |    13,030 |
+----------------------------+-----------+-----------+
| Cash flow from investments |         2 |      -216 |
+----------------------------+-----------+-----------+
| Cash flow from financing   | 2,039,623 |    -5,570 |
+----------------------------+-----------+-----------+
| Liquid assets 30 September |    93,075 |    48,373 |
+----------------------------+-----------+-----------+

The cash flow statement presents the cash flows for the period on the cash
basis, divided into cash flows from operations, investments and financing. Cash
flows from operations includes the cash flows generated from day-to-day
operations. Cash flow from investments includes payments related to tangible and
intangible assets, investments held to maturity and shares that are not
considered as belonging to cash flow from operations. Cash flow from financing
includes cash flows originating in the financing of operations either on equity
or liability terms from money or capital market. Liquid assets include cash in
hand and receivables from financial institutions payable on demand.  The
statement has been prepared using the indirect method.

+---------------------------------------------------+----------------+---------+
|Fair values of financial assets and liabilities    |                |         |
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |  Recognised at|                |         |
|                 |                 |     fair value|                |         |
|                 |        Loans and| through profit|   Available for|         |
|EUR 1,000        |      receivables|        or loss|            sale|    Total|
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |               |                          |
+-----------------+-----------------+---------------+--------------------------+
|Financial assets |                 |               |                          |
+-----------------+-----------------+---------------+----------------+---------+
|Receivables from |                 |               |                |         |
|financial        |                 |               |                |         |
|institutions     |           93,075|              -|               -|   93,075|
+-----------------+-----------------+---------------+----------------+---------+
|Derivative       |                 |               |                |         |
|contracts        |                -|        165,305|               -|  165,305|
+-----------------+-----------------+---------------+----------------+---------+
|Receivables from |                 |               |                |         |
|customers        |        7,394,937|               |                |7,394,937|
+-----------------+-----------------+---------------+----------------+---------+
|Equities         |                -|              -|              17|       17|
+-----------------+-----------------+---------------+----------------+---------+
|Other receivables|           88,788|              -|               -|   88,788|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 30    |                 |               |                |         |
|September 2011   |        7,576,800|        165,305|              17|7,742,122|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 30    |                 |               |                |         |
|September 2010   |        4,320,954|         95,897|              17|4,416,868|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|December 2010    |        5,118,844|         71,255|              17|5,190,117|
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |               |                          |
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |  Recognised at|                |         |
|                 |                 |     fair value|                |         |
|                 |                 | through profit|           Other|         |
|EUR 1,000        |                 |        or loss|     liabilities|    Total|
+-----------------+-----------------+---------------+----------------+---------+
|Liabilities to   |                 |               |                |         |
|financial        |                 |               |                |         |
|institutions     |                -|              -|       1,980,000|1,980,000|
+-----------------+-----------------+---------------+----------------+---------+
|Derivative       |                 |               |                |         |
|contracts        |                -|          6,233|               -|    6,233|
+-----------------+-----------------+---------------+----------------+---------+
|Debt securities  |                 |               |                |         |
|issued to the    |                 |               |                |         |
|public           |                -|              -|       5,388,949|5,388,949|
+-----------------+-----------------+---------------+----------------+---------+
|Subordinated     |                 |               |                |         |
|liabilities      |                -|              -|          20,000|   20,000|
+-----------------+-----------------+---------------+----------------+---------+
|Other liabilities|                -|              -|         132,252|  132,252|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 30    |                 |               |                |         |
|September 2011   |                -|          6,233|       7,521,202|7,527,435|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 30    |                 |               |                |         |
|September 2010   |                -|          5,417|       4,269,775|4,275,192|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|December 2010    |                -|         21,835|       5,010,399|5,032,235|
+-----------------+-----------------+---------------+----------------+---------+

Debt securities issued to the public are carried at amortised cost.  On 30
September 2011, the fair value of these debt instruments was approximately EUR
162,788 thousand higher than their carrying amount, based on information
available in markets and employing commonly used valuation techniques.
Subordinated liabilities are carried at amortised cost. Their  fair value are
substantially lower than their carrying amount, but determining fair values
reliably is difficult in the current market situation.

Derivative Contracts 30.9.2011

+-----------+-----------------------------------------+-------------------+--------+
|EUR        |                                         |    Fair values    |        |
|thousand   |Nominal values/the remaining maturity    |                   |        |
+-----------+---------+---------+----------+----------+-------+-----------+ Credit |
|           |Less than|         | More than|          |       |           |counter-|
|           |   1 year|1-5 years|   5 years|     Total| Assets|Liabilities| value  |
+-----------+---------+---------+----------+----------+-------+-----------+--------+
|Interest   |         |         |          |          |       |           |        |
|rate       |         |         |          |          |       |           |        |
|derivatives|         |         |          |          |       |           |        |
+-----------+---------+---------+----------+----------+-------+-----------+--------+
|Hedging    |4,784,286|7,500,000|2,000,000 |14,284,286|165,305|      6,233| 291,731|
+-----------+---------+---------+----------+----------+-------+-----------+--------+
|Trading    |         |         |          |          |       |           |        |
+-----------+---------+---------+----------+----------+-------+-----------+--------+
|Total      |4,784,286|7,500,000| 2,000,000|14,284,286|165,305|      6,233| 291,731|
+-----------+---------+---------+----------+----------+-------+-----------+--------+


Derivative Contracts 30.9.2010

+-------------+-----------------------------------+------------------+---------+
|             |Nominal values/the remaining       |   Fair values    |         |
|EUR thousand |maturity                           |                  |         |
+-------------+--------+---------+------+---------+------+-----------+         |
|             |        |         |  More|         |      |           |         |
|             |    Less|         |  than|         |      |           | Credit  |
|             | than 1 |         |    5 |         |      |           |counter- |
|             |    year|1-5 years| years|    Total|Assets|Liabilities|  value  |
+-------------+--------+---------+------+---------+------+-----------+---------+
|Interest rate|        |         |      |         |      |           |         |
|derivatives  |        |         |      |         |      |           |         |
+-------------+--------+---------+------+---------+------+-----------+---------+
|Hedging      | 256,249|8,459,739|      |8,715,988|95,897|      5,417|  184,338|
+-------------+--------+---------+------+---------+------+-----------+---------+
|Trading      |        |         |      |         |      |           |         |
+-------------+--------+---------+------+---------+------+-----------+---------+
|Total        | 256,249|8,459,739|     0|8,715,988|95,897|      5,417|  184,338|
+-------------+--------+---------+------+---------+------+-----------+---------+


All derivative contracts have been entered into for hedging purposes, regardless
of their classification in accounting.

Related-party transactions

OPA's related parties include OP-Pohjola Group Central Cooperative and its
subsidiaries,  the OP-Pohjola Group pension insurance organisations OP-Pension
Fund and OP-Pension Foundation, and the company's administrative personnel.
Standard terms and conditions for credit are applied to loans granted to the
related parties. Loans are tied to generally used reference rates. Related-party
transactions have not undergone any substantial changes since 31 December 2010.

The Interim Report for 1 January - 30 September 2011 has been prepared in
accordance with IAS 34 (Interim Financial Reporting), as approved by the EU. The
Financial Statements 2010 contain a description of the accounting policies
applied. This Interim Report is based on unaudited figures. Given that all
figures have been rounded off, the sum total of individual figures may deviate
from the presented sums.

Helsinki, 1 November 2011

OP Mortgage Bank
Board of Directors

For further information, please contact Mr Lauri Iloniemi, Managing Director,
tel. +358 10 252 3541
[1]  For balance sheet and other cross-sectional figures, the point of
comparison is the figure at the end of 2010. For income statement and other
cumulative figures, the point of comparison is the figure for January-September
period in the previous year.
[2]  For balance sheet and other cross-sectional figures, the point of
comparison is the figure at the end of 2010. For income statement and other
cumulative figures, the point of comparison is the figure for January-September
period in the previous year.






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Source: OP Mortgage Bank via Thomson Reuters ONE

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