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OP Mortgage Bank (70ZM)

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Wednesday 04 May, 2011

OP Mortgage Bank

OP Mortgage Bank 1st Quarter Results






OP Mortgage Bank
Interim Report for January-March 2011
4 May 2011, 9.00 am Finnish time (GMT+3)

INTERIM REPORT FOR JANUARY-MARCH 2011

OP Mortgage Bank's (OPA) loan portfolio increased from EUR 5,008 million on 31
December to EUR 6,713 million on 31 March 2011. The bank increased its loan
portfolio in March when it purchased housing loans from OP-Pohjola Group member
cooperative banks. During the reporting period, OPA did not issue any covered
bonds.


Earnings Performance

+-------------------------------+---------+---------+-----------+--------+
| EUR Thousand                  | Q1/2011 | Q1/2010 | Change, % |  2010  |
+-------------------------------+---------+---------+-----------+--------+
|                               |         |         |           |        |
+-------------------------------+---------+---------+-----------+--------+
| Income                        |         |         |           |        |
+-------------------------------+---------+---------+-----------+--------+
| Net interest income           |   5,200 |   4,091 |        27 | 16,350 |
+-------------------------------+---------+---------+-----------+--------+
| Net commissions and fees      |  -1,894 |  -2,177 |       -13 | -8,450 |
+-------------------------------+---------+---------+-----------+--------+
| Net trading income            |       0 |       0 |           |     -1 |
+-------------------------------+---------+---------+-----------+--------+
| Net investment income         |       1 |       1 |         - |      2 |
+-------------------------------+---------+---------+-----------+--------+
| Other operating income        |       - |       0 |           |     19 |
+-------------------------------+---------+---------+-----------+--------+
| Total                         |   3,307 |   1,914 |        73 |  7,920 |
+-------------------------------+---------+---------+-----------+--------+
|                               |         |         |           |        |
+-------------------------------+---------+---------+-----------+--------+
| Expenses                      |         |         |           |        |
+-------------------------------+---------+---------+-----------+--------+
| Personnel costs               |      89 |      81 |         9 |    288 |
+-------------------------------+---------+---------+-----------+--------+
| Other administrative expenses |     550 |     373 |        47 |  1,396 |
+-------------------------------+---------+---------+-----------+--------+
| Other operating expenses      |     293 |     228 |        28 |  1,398 |
+-------------------------------+---------+---------+-----------+--------+
| Total                         |     931 |     683 |        36 |  3,082 |
+-------------------------------+---------+---------+-----------+--------+
|                               |         |         |           |        |
+-------------------------------+---------+---------+-----------+--------+
| Earnings before tax           |   2,376 |   1,231 |        93 |  4,839 |
+-------------------------------+---------+---------+-----------+--------+


Net interest income increased to EUR 5,200 thousand (4,091). Improvements in net
interest income and earnings were due to the growth in the loan portfolio.
Earnings before tax for January-March increased to EUR 2,376 thousand
(1,230)[1].

Net commissions and fees were negative with commission income increasing to EUR
768 thousand (651) and commission expenses decreasing to EUR 2,661 thousand
(2,828). Commission expenses stem mainly from commissions paid to OP-Pohjola
Group member banks for servicing housing loans.

In the review period, the bank's expenses rose to EUR 931 thousand (683). Growth
in expenses derived largely from the development and operating services of the
information systems.

Balance Sheet and Off-balance Sheet Commitments

OPA's balance sheet total amounted to EUR 6,948 million on 31 March (5,191) [2].

Change in major assets and liabilities

+-----------------------------+--------+------+-----------+-----------+--------+
|                             |31 March|31 Dec|30 Sep 2010|30 Jun 2010|31 March|
|EUR million                  |  2011  | 2010 |           |           |  2010  |
+-----------------------------+--------+------+-----------+-----------+--------+
|                             |        |      |           |           |        |
+-----------------------------+--------+------+-----------+-----------+--------+
|Balance sheet                | 6,948  |5,191 |   4,418   |   4,624   | 4,450  |
+-----------------------------+--------+------+-----------+-----------+--------+
|Receivables from customers   | 6,713  |5,008 |   4,213   |   4,398   | 4,203  |
+-----------------------------+--------+------+-----------+-----------+--------+
|Receivables from financial   |  119   |  62  |    48     |    89     |   56   |
|institutions                 |        |      |           |           |        |
+-----------------------------+--------+------+-----------+-----------+--------+
|Debt securities issued to the| 3,217  |3,287 |   3,330   |   3,332   | 3,336  |
|public                       |        |      |           |           |        |
+-----------------------------+--------+------+-----------+-----------+--------+
|Liabilities to financial     | 3,350  |1,640 |    840    |   1,070   |  840   |
|institutions                 |        |      |           |           |        |
+-----------------------------+--------+------+-----------+-----------+--------+
|Shareholders' equity         |  211   | 159  |    143    |    142    |  141   |
+-----------------------------+--------+------+-----------+-----------+--------+
|Off-balance-sheet commitments|   8    |  7   |     9     |    10     |   12   |
+-----------------------------+--------+------+-----------+-----------+--------+

The loan portfolio increased from EUR 5,008 million on 31 December 2010 to EUR
6,713 million on 31 March 2011. OPA increased its loan portfolio in the review
period when it purchased housing loans from OP-Pohjola-Group member banks for
EUR 1,932 million.

On 31 March, households accounted for 99 % (99) of the loan portfolio and
housing corporations for 1 % (1). The bank's non-performing loans increased but
remained at low levels totalling
EUR 1.4 million (1) on March 2011. No impairment losses on loans were
recognised.

The carrying amount of bonds issued to the public totalled EUR 3,217 million
(3,287) on 31 March.  In addition to bonds, other funding was based on financing
loans granted by Pohjola Bank plc (Pohjola). On 31 March, financing loans
totalled EUR 3,350 million (1,640).

Shareholders' equity rose to EUR 211 million (159). Retained earnings amounted
to EUR 15.6 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 12,551
million (7,663). All derivative contracts have been concluded for hedging
purposes. Pohjola is the counterparty to all derivative contracts.

Capital Adequacy

OPA's capital adequacy ratio stood at 9.4 % on 31 March. Shareholder's equity
increased by EUR 50 million in March when OP-Pohjola Group Central Cooperative
made an additional investment in OPA. OPA calculates its capital adequacy in
compliance with Basel II. Credit risk and the capital requirement for
operational risk are calculated according to the standardised approach.

+------------------------------------------------+---------+---------+---------+
|                                                | 31 March|   31 Dec| 31 March|
|OWN FUNDS, EUR thousand                         |     2011|     2010|     2010|
+------------------------------------------------+---------+---------+---------+
|Tier I                                          |  209,533|  157,669|  140,057|
+------------------------------------------------+---------+---------+---------+
|     of which capital loans                     |         |         |         |
+------------------------------------------------+---------+---------+---------+
|Tier II                                         |   20,000|   20,000|   20,000|
+------------------------------------------------+---------+---------+---------+
|Decreases                                       |         |         |         |
+------------------------------------------------+---------+---------+---------+
|Total                                           |  229,533|  177,669|  160,057|
+------------------------------------------------+---------+---------+---------+
|                                                |         |         |         |
+------------------------------------------------+---------+---------+---------+
|Risk-weighted receivables, investments and off- |         |         |         |
|balance sheet commitments                       |2,448,034|1,836,279|1,562,989|
+------------------------------------------------+---------+---------+---------+
|                                                |         |         |         |
+------------------------------------------------+---------+---------+---------+
|Capital adequacy ratio, %                       |      9,4|      9,7|     10,2|
+------------------------------------------------+---------+---------+---------+
|                                                |         |         |         |
+------------------------------------------------+---------+---------+---------+
|Tier I ratio to risk-weighted receivables,      |         |         |         |
|investments and off-balance sheet commitments   |      8.6|      8,6|      9,0|
+------------------------------------------------+---------+---------+---------+

The increase in shareholders' equity arising from the additional investment and
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 off balance-sheet commitments,  EUR |             |   31 Dec|             |
|thousand                                |31 March 2011|     2010|31 March 2010|
+----------------------------------------+-------------+---------+-------------+
|                                        |             |         |             |
+----------------------------------------+-------------+---------+-------------+
| Receivables and investments            |    2,434,204|1,824,798|    1,548,950|
+----------------------------------------+-------------+---------+-------------+
|  Off-balance-sheet items               |        3,340|    2,748|        3,187|
+----------------------------------------+-------------+---------+-------------+
| Market risk                            |            -|        -|            -|
+----------------------------------------+-------------+---------+-------------+
| Operational risks                      |       10,490|    8,733|       10,852|
+----------------------------------------+-------------+---------+-------------+
|                                        |             |         |             |
|Risk-weighted receivables, investments  |             |         |             |
|and off balance-sheet commitments, total|    2,448,034|1,836,279|    1,562,989|
+----------------------------------------+-------------+---------+-------------+


The increase in the amount of risk-weighted receivables was due to an increased
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 212 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 31 March, 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 balance sheet date

OPA launched a covered bond issue at a nominal valued of EUR 1,000 million 1
April 2011.

Prospects for the rest of the year

The existing issuance programme will make it possible to issue new covered bonds
in the end of 2011. The overall quality of the credit portfolio is expected to
remain strong.

Income Statement

+-------------------------------+----------+----------+-----------+--------+
| EUR 1,000                     |  Q1/2011 |  Q1/2010 | Change, % |   2010 |
+-------------------------------+----------+----------+-----------+--------+
|                               |          |          |           |        |
+-------------------------------+----------+----------+-----------+--------+
| Interest income               |   22,120 |   13,994 |        58 | 63,314 |
+-------------------------------+----------+----------+-----------+--------+
| Interest expenses             |   16,920 |    9,903 |        71 | 46,963 |
+-------------------------------+----------+----------+-----------+--------+
| Net interest income           |    5,200 |    4,091 |        27 | 16,350 |
+-------------------------------+----------+----------+-----------+--------+
| Net commissions and fees      |   -1,894 |   -2,177 |       -13 | -8,450 |
+-------------------------------+----------+----------+-----------+--------+
| Net trading income            |        0 |        0 |           |     -1 |
+-------------------------------+----------+----------+-----------+--------+
| Net investment income         |        1 |        1 |       -20 |      2 |
+-------------------------------+----------+----------+-----------+--------+
| Other operating income        |        0 |       -1 |           |     19 |
+-------------------------------+----------+----------+-----------+--------+
| Personnel costs               |       89 |       81 |         9 |    288 |
+-------------------------------+----------+----------+-----------+--------+
| Other administrative expenses |      550 |      373 |        47 |  1,396 |
+-------------------------------+----------+----------+-----------+--------+
| Other operating expenses      |      293 |      228 |        28 |  1,398 |
+-------------------------------+----------+----------+-----------+--------+
| Earnings before tax           |    2,376 |    1,231 |        93 |  4,839 |
+-------------------------------+----------+----------+-----------+--------+
| Income tax expense            |      618 |      320 |        93 |  1,264 |
+-------------------------------+----------+----------+-----------+--------+
| Profit for the period         |    1,758 |      910 |        93 |  3,574 |
+-------------------------------+----------+----------+-----------+--------+

Key Ratios

+---------------------------+---------+---------+------+
|                           | Q1/2011 | Q1/2010 | 2010 |
+---------------------------+---------+---------+------+
| Return on equity (ROE), % |     3.8 |     2.6 | 2.39 |
+---------------------------+---------+---------+------+
| Cost/income ratio, %      |      28 |      36 |   39 |
+---------------------------+---------+---------+------+


Formulae for key ratios

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

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

Balance Sheet

+------------------------------+-------------+-------------+---------+---------+
|                              |             |             |         |   31 Dec|
|EUR 1,000                     |31 March 2011|31 March 2010|Change, %|     2010|
+------------------------------+-------------+-------------+---------+---------+
|                              |             |             |         |         |
+------------------------------+-------------+-------------+---------+---------+
|Receivables from financial    |             |             |         |         |
|institutions                  |      119,032|       56,093|         |   61,673|
+------------------------------+-------------+-------------+---------+---------+
|Derivative contracts          |       37,975|       94,378|      -60|   71,255|
+------------------------------+-------------+-------------+---------+---------+
|Receivables from customers    |    6,712,586|    4,202,733|       60|5,008,381|
+------------------------------+-------------+-------------+---------+---------+
|Investment assets             |           17|           17|        0|       17|
+------------------------------+-------------+-------------+---------+---------+
|Intangible assets             |          829|          886|       -6|      914|
+------------------------------+-------------+-------------+---------+---------+
|Property, plant and equipment |            3|            5|      -47|        3|
+------------------------------+-------------+-------------+---------+---------+
|Other assets                  |       77,383|       95,524|      -19|   48,790|
+------------------------------+-------------+-------------+---------+---------+
|Tax assets                    |             |             |         |         |
+------------------------------+-------------+-------------+---------+---------+
|Total assets                  |    6,947,825|    4,449,634|       56|5,191,034|
+------------------------------+-------------+-------------+---------+---------+
|                              |             |             |         |         |
+------------------------------+-------------+-------------+---------+---------+
|Liabilities to financial      |             |             |         |         |
|institutions                  |    3,350,000|      840,000|         |1,640,000|
+------------------------------+-------------+-------------+---------+---------+
|Derivative contracts          |       53 ,86|        5,756|         |   21,835|
+------------------------------+-------------+-------------+---------+---------+
|Debt securities issued to the |             |             |         |         |
|public                        |    3,216,903|    3,336,060|       -4|3,286,747|
+------------------------------+-------------+-------------+---------+---------+
|Provisions and other          |             |             |         |         |
|liabilities                   |       96,381|      106,233|       -9|   63,513|
+------------------------------+-------------+-------------+---------+---------+
|Tax liabilities               |          699|          450|       55|      140|
+------------------------------+-------------+-------------+---------+---------+
|Subordinated debt securities  |       20,000|       20,000|        0|   20,000|
+------------------------------+-------------+-------------+---------+---------+
|Total liabilities             |    6,737,269|    4,308,500|       56|5,032,235|
+------------------------------+-------------+-------------+---------+---------+
|Shareholders' equity          |             |             |         |         |
+------------------------------+-------------+-------------+---------+---------+
|  Share capital               |       60,000|       60,000|        0|   60,000|
+------------------------------+-------------+-------------+---------+---------+
|   Reserve for invested       |             |             |         |         |
|unrestricted              .   |             |             |         |         |
|equity                        |      135,000|       70,000|         |   85,000|
+------------------------------+-------------+-------------+---------+---------+
|  Retained earnings           |       15,557|       11,135|       40|   13,799|
+------------------------------+-------------+-------------+---------+---------+
|Total equity                  |      210,557|      141,135|       49|  158,799|
+------------------------------+-------------+-------------+---------+---------+
|Total liabilities and         |             |             |         |         |
|shareholders' equity          |    6,947,825|    4,449,634|       56|5,191,034|
+------------------------------+-------------+-------------+---------+---------+

Off-balance-sheet Commitments
+------------------------------+-------------+-------------+------------+
|EUR 1,000                     |31 March 2011|31 March 2010|31 Dec  2010|
+------------------------------+-------------+-------------+------------+
|Irrevocable credit commitments|        7,676|       12,245|       7,456|
+------------------------------+-------------+-------------+------------+

Change Calculation on Shareholders' Equity

+--------------------+-------------+--------------+---------------+------------+
|                    |             |              |       Retained|            |
|EUR thousand        |Share capital|Other reserves|       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              |             |              |            910|         910|
+--------------------+-------------+--------------+---------------+------------+
|Other changes       |             |              |               |            |
+--------------------+-------------+--------------+---------------+------------+
|Shareholders' equity|             |              |               |            |
|31 Mar 2010         |       60,000|        70,000|         11,135|     141,135|
+--------------------+-------------+--------------+---------------+------------+
|                    |             |              |               |            |
+--------------------+-------------+--------------+---------------+------------+
|                    |             |              |       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              |             |              |          1,758|       1,758|
+--------------------+-------------+--------------+---------------+------------+
|Other changes       |             |              |               |            |
+--------------------+-------------+--------------+---------------+------------+
|Shareholders' equity|             |              |               |            |
|31 Dec 2011         |       60,000|       135,000|         15,557|     210,557|
+--------------------+-------------+--------------+---------------+------------+

Cash Flow Statement

+----------------------------------------+---------+---------+
| EUR 1,000                              | Q1/2011 | Q1/2010 |
+----------------------------------------+---------+---------+
|                                        |         |         |
+----------------------------------------+---------+---------+
| Cash and cash equivalents 1 January    |  61,673 |  41,129 |
+----------------------------------------+---------+---------+
| Cash flow from operating activities    |   6,538 |     315 |
+----------------------------------------+---------+---------+
| Cash flow used in investing activities |       0 |      -6 |
+----------------------------------------+---------+---------+
| Cash flow used in financing activities |  50,822 |     764 |
+----------------------------------------+---------+---------+
| Cash and cash equivalents 31 March     | 119,032 |  42,201 |
+----------------------------------------+---------+---------+

The cash flow statement presents cash flows for the period on a cash basis,
divided into cash flow from operating activities and cash flow used in
investment activities and financing activities. Cash flow from operating
activities includes that generated by daily operations. Cash flow used in
investing activities includes payments related to property, plant and equipment
and intangible assets, investments held to maturity and shares not regarded as
belonging to cash flow from operating activities. Cash flow used in financing
activities includes cash flows based on the financing of operations either on
equity or liability terms in the money or capital market. Cash and cash
equivalents include cash in hand and callable receivables from financial
institutions. The statement is prepared using the indirect method.


+---------------------------------------------------+----------------+---------+
|Fair values of financial assets and liabilities    |                |         |
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |  Recognised at|                |         |
|                 |                 |     fair value|                |         |
|                 |        Loans and| through profit|   Available for|         |
|EUR Thousand     |      receivables|        or loss|            sale|    Total|
+-----------------+-----------------+---------------+----------------+---------+
|Financial assets |                 |               |                          |
+-----------------+-----------------+---------------+----------------+---------+
|Receivables from |                 |               |                |         |
|financial        |                 |               |                |         |
|institutions     |          119,032|               |                |  119,032|
+-----------------+-----------------+---------------+----------------+---------+
|Derivative       |                 |               |                |         |
|contracts        |                 |         37,975|                |   37,975|
+-----------------+-----------------+---------------+----------------+---------+
|Receivables from |                 |               |                |         |
|customers        |        6,712,586|               |                |6,712,586|
+-----------------+-----------------+---------------+----------------+---------+
|Equities         |                 |               |              17|         |
+-----------------+-----------------+---------------+----------------+---------+
|Other receivables|           77,383|               |                |   77,383|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|March 2011       |        6,909,002|         37,975|              17|6,946,994|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|March 2010       |        4,354,349|         94,378|              17|4,448,744|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|December 2010    |        5,118,844|         71,255|              17|5,190,117|
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |               |                          |
+-----------------+-----------------+---------------+----------------+---------+
|                 |                 |  Recognised at|                |         |
|                 |                 |     fair value|                |         |
|                 |                 | through profit|           Other|         |
|EUR Thousand     |                 |        or loss|     liabilities|    Total|
+-----------------+-----------------+---------------+----------------+---------+
|Financial        |                 |               |                |         |
|liabilities      |                 |               |                |         |
+-----------------+-----------------+---------------+----------------+---------+
|Liabilities to   |                 |               |                |         |
|financial        |                 |               |                |         |
|institutions     |                -|               |       3,350,000|3,350,000|
+-----------------+-----------------+---------------+----------------+---------+
|Derivative       |                 |               |                |         |
|contracts        |                -|         53,286|                |   53,286|
+-----------------+-----------------+---------------+----------------+---------+
|Debt securities  |                 |               |                |         |
|issued to the    |                 |               |                |         |
|public           |                -|               |       3,216,903|3,216,903|
+-----------------+-----------------+---------------+----------------+---------+
|Subordinated     |                 |               |                |         |
|liabilities      |                -|               |          20,000|   20,000|
+-----------------+-----------------+---------------+----------------+---------+
|Other liabilities|                -|               |          97,080|   97,080|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|March 2011       |                -|         53,286|       6,683,983|6,737,269|
+-----------------+-----------------+---------------+----------------+---------+
|Balance at 31    |                 |               |                |         |
|March 2010       |                -|          5,756|       4,302,743|4,308,499|
+-----------------+-----------------+---------------+----------------+---------+
|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 31 March
2011, the fair value of these debt instruments was approximately EUR 11,379
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 31 March 2011

+-----------+---------------------------------------+------------------+--------+
|EUR 1,000  |Nominal values/remaining maturity      |   Fair values    |        |
+-----------+-------+----------+---------+----------+------+-----------+        |
|           |   Less|          |         |          |      |           | Credit |
|           |than 1 |          |More than|          |      |           |counter-|
|           |   year| 1-5 years|  5 years|     Total|Assets|Liabilities| value  |
+-----------+-------+----------+---------+----------+------+-----------+--------+
|Interest-  |       |          |         |          |      |           |        |
|rate       |       |          |         |          |      |           |        |
|derivatives|       |          |         |          |      |           |        |
+-----------+-------+----------+---------+----------+------+-----------+--------+
|Hedging    |582,889|10,968,259|1,000,000|12,551,148|37,975|     53,286| 145,132|
+-----------+-------+----------+---------+----------+------+-----------+--------+
|Trading    |       |          |         |          |      |           |        |
+-----------+-------+----------+---------+----------+------+-----------+--------+
|Total      |582,889|10,968,259|1,000,000|12,551,148|37,975|     53,286| 145,132|
+-----------+-------+----------+---------+----------+------+-----------+--------+


Derivative Contracts 31 March 2010

+------------+-------------------------------------+------------------+--------+
|EUR 1,000   |Nominal values/remaining maturity    |   Fair values    |        |
+------------+----------+---------+------+---------+------+-----------+        |
|            |          |         |  More|         |      |           |        |
|            |          |         |  than|         |      |           | Credit |
|            | Less than|         |    5 |         |      |           |counter-|
|            |    1 year|1-5 years| years|    Total|Assets|Liabilities| value  |
+------------+----------+---------+------+---------+------+-----------+--------+
|Interest-   |          |         |      |         |      |           |        |
|rate        |          |         |      |         |      |           |        |
|derivatives |          |         |      |         |      |           |        |
+------------+----------+---------+------+---------+------+-----------+--------+
|Hedging     | 2,215,491|5,447,930|     -|7,663,421|94,378|      5,756| 207,227|
+------------+----------+---------+------+---------+------+-----------+--------+
|Trading     |          |         |      |         |      |           |        |
+------------+----------+---------+------+---------+------+-----------+--------+
|Total       | 2,215,491|5,447,930|     -|7,663,421|94,378|      5,756| 207,227|
+------------+----------+---------+------+---------+------+-----------+--------+

All derivative contracts have been concluded 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 - 31 March 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, 4 May 2011

OP Mortgage Bank
Board of Directors

For further information, please contact Mr Lauri Iloniemi, Managing Director,
tel. +358 10 252 3541






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Source: OP Mortgage Bank via Thomson Reuters ONE

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