Bli medlem
Bli medlem

Du är här

2020-10-22

OP Mortgage Bank: Interim Report for 1 January–30 September 2020

OP Mortgage Bank
Interim Report
Stock Exchange Release 22 October 2020 at 10.00am EEST

OP Mortgage Bank: Interim Report for 1 January–30 September 2020

OP Mortgage Bank (OP MB) is part of OP Financial Group and its role is to raise, together with OP Corporate Bank plc, funding for OP from money and capital markets. OP MB is responsible for the Group's funding for the part of covered bond issuance.

Financial standing

The intermediary loans and loan portfolio of OP MB totalled EUR 15,056 million (14,335)* on 30 September 2020. OP MB issued a 1 billion-euro fixed-rate covered bond with a maturity of 8.25 years in international capital markets in January. Out of the proceeds of the bond, EUR 984 million were intermediated to 77 OP cooperative banks in the form of intermediary loans in April. In February, a new extension of an intermediary loan model was performed on a bond issued in February 2019 that will mature in 2029. As part of this extension, seven OP cooperative banks applied for an intermediary loan from OP MB at a total amount of EUR 185 million.

In April, OP MB issued a 500 million-euro retained covered bond with a maturity of two years. Out of the proceeds of the bond, EUR 100 million was intermediated to an OP cooperative bank in the form of an intermediary loan in June. In April, OP MB also issued a 300 million-euro retained covered bond with a maturity of eight years. The proceeds of the bond were intermediated in full to five OP cooperative banks in the form of intermediary loans. The bond issues in April were performed as internal issues within OP Financial Group.

On 30 September 2020, 120 OP cooperative banks had a total of EUR 10,255 million (8,706) in intermediate loans from OP MB.

Impairment loss on receivables increased to EUR 1.3 million (0.0). As a result of the coronavirus crisis, customers have actively applied for repayment holidays on their loans. Combined with the changes in macroeconomic parameters applied in the calculation of expected credit losses, this increased the amount of expected credit losses. The new definition of default adopted in March also increased the amount of expected credit losses.

The company's financial standing remained stable throughout the reporting period. Earnings before tax amounted to EUR 6.3 million (11.8).

*The comparatives for 2019 are given in brackets. For income statement and other aggregated figures, January–September 2019 figures serve as comparatives. For balance-sheet and other cross-sectional figures, figures at the end of the previous financial year (31 December 2019) serve as comparatives.

Collateralisation of bonds issued to the public

On 30 September 2020, loans as collateral in security of the covered bonds issued under the Euro Medium Term Covered Note programme worth EUR 20 billion established on 12 November 2010 under the Act on Mortgage Credit Banks (Laki kiinnityspankkitoiminnasta (688/2010)) totalled EUR 15,392 million.

Capital adequacy and capital base

OP MB’s Common Equity Tier 1 (CET1) ratio stood at 61.0% (69.8) on 30 September 2020. The lower ratio was affected in particular by the rise in risk weights caused by the adoption of the new definition of default. The minimum CET1 capital requirement is 4.5% and the requirement for the capital conservation buffer is 2.5%, i.e. the total CET1 capital requirement is 7%. The minimum total capital requirement is 8% and 10.5% with increased capital conservation buffer. Earnings for the financial year were not included in CET1 capital.

OP MB uses the Internal Ratings Based Approach (IRBA) to measure its capital adequacy requirement for credit risk. OP MB uses the Standardised Approach to measure its capital adequacy for operational risk.

OP MB has presented its capital base and capital adequacy in accordance with the EU Capital Requirements Regulation (EU 575/2013).

Capital base and capital adequacy, TEUR 30 Sep 2020 31 Dec 2019
     
Shareholders' equity 369,781 376,616
Common Equity Tier 1 (CET1) before deductions 369,781 376,616
Excess funding of pension liability -69 -69
Share of unaudited profits -5,055 -11,892
Shortfall of ECL minus expected losses -3,815 -5,589
Common Equity Tier 1 (CET1) 360,841 359,066
Tier 1 capital (T1) 360,841 359,066
Tier 2 Capital (T2)    
Total capital base 360,841 359,066
     
Total risk exposure amount    
Credit and counterparty risk 556,575

Tala om vad ni tycker

Tala om vad ni tycker

Ni är just nu inne på en betaversion av nya aktiespararna. Lämna gärna feedback på vad ni tycker i formuläret nedan.