OP Corporate Bank plc

OP Pohjola’s Interim Report for 1 January–30 September 2025: OP Pohjola's operating profit EUR 1,715 million – third quarter record-strong

OP Pohjola
Interim Report for 1 January–30 September 2025
Stock Exchange Release 28 October 2025 at 9.00 EET

OP Pohjola’s Interim Report for 1 January–30 September 2025: OP Pohjola's operating profit EUR 1,715 million – third quarter record-strong

• OP Financial Group's name is OP Pohjola, effective as of 28 October 2025. OP Pohjola's structure, the official names of the companies or the marketing names of business units have not changed.
• Operating profit was EUR 1,715 million (1,948). Operating profit fell by 12% or EUR 234 million year on year. The third-quarter operating profit increased to EUR 725 million (720).
• Net interest income decreased by 13% to EUR 1,776 million (2,039). Insurance service result increased by 90% to EUR 181 million (95) and net commissions and fees increased by 1% to EUR 602 million (599). Income from customer business, that is, net interest income, insurance service result and net commissions and fees, decreased by a total of 6% to EUR 2,559 million (2,733).
• Impairment loss on receivables reversed were EUR 46 million (-72). Ratio of impairment loss on receivables to loan and guarantee portfolio was -0.06% (0.10).
• Investment income decreased by 15% to EUR 426 million (499).
• Total expenses grew by 6% to EUR 1,725 million (1,629). The cost/income ratio weakened to 51% (45).
• Loan portfolio grew year on year by 2% to EUR 100.2 bn (98.0). Deposits grew by 5% to EUR 79.8 bn (76.2).
• The CET1 ratio was 21.0% (21.5), which exceeds the minimum regulatory requirement by 6.7 percentage points. Changes in the collateral management process decreased capital adequacy. The changes in the EU Capital Requirements Regulation (CRR3), in effect since 1 January 2025, reduced capital adequacy slightly.
• The Retail Banking segment's operating profit decreased by 31% to EUR 740 million (1,079). Net interest income decreased by 17% to EUR 1,334 million (1,616). Impairment loss on receivables reversed came to EUR 7 million (-57). Net commissions and fees totalled EUR 540 million (541). The cost/income ratio weakened to 62% (49). The loan portfolio grew year on year by 1% to EUR 71.5 billion (70.6). Deposits increased by 5% to EUR 65.6 billion (62.4). Assets under management grew by 9% to EUR 101.8 billion (93.2).
• Corporate Banking segment's operating profit grew by 21% to EUR 454 million (376). Net interest income grew by 8% to EUR 445 million (413). Impairment loss on receivables reversed came to EUR 39 million (-15). Net commissions and fees totalled EUR 64 million (64). The cost/income ratio was 34% (34). The loan portfolio grew year on year by 4 % to EUR 28.7 billion (27.5), while deposits increased by 3% to EUR 14.8 billion (14.4).
• The Insurance segment's operating profit decreased by 6% to EUR 429 million (458). Insurance service result grew to EUR 181 million (95). Investment income fell to EUR 242 million (365). The combined ratio reported by non-life insurance improved to 88.1% (95.0).
• Group Functions' operating profit amounted to EUR 102 million (4). Income from investment activities, EUR 68 million (4), was increased by changes in the fair value of equities.
• OP Pohjola will renew its owner-customer benefits as of 1 January 2026, when the Act on changing the bonus practices in the financial sector enters into force. As part of the new system, OP bonuses are also increased from the normal level of 2022, they are earned from a wider range of services, and customers may also choose how to use their bonuses. During the reporting period, the combined value to owner-customers of OP bonuses and daily banking services free of monthly charge totalled EUR 311 million.
• Outlook: On 13 October 2025, OP Pohjola raised its earnings outlook for 2025. Operating profit is expected to be at the same level or higher than in 2023, when it was EUR 2,050 million. For additional information, see "Outlook".

OP Pohjola's key figures and ratios

Comparatives for the income statement items are based on the corresponding figures in 2024. Unless otherwise specified, figures from 31 December 2024 are used as comparatives for balance-sheet and other cross-sectional items.
* Change in ratio, percentage point(s).
** As of 1 January 2025, OP Asset Management Ltd, OP Fund Management Company Ltd and OP Real Estate Asset Management Ltd, including subsidiaries, are reported as part of the Retail Banking segment. Comparative information of 2024 has been adjusted accordingly.
*** The presentation of assets under management was changed at the beginning of 2025. Comparatives have been adjusted to correspond to the current definition.

Comments by the President and Group CEO of OP Pohjola

New benefits package launched for owner-customers; OP Financial Group renamed OP Pohjola

As of 28 October 2025, OP Financial Group will be known as OP Pohjola. The name showcases our unique service package for our over 2.1 million owner-customers: we provide all the banking, insurance and wealth management services our customers need, on a one-stop-shop basis.

Furthermore, we have announced a new benefits package for owner-customers, which will be valid from the start of next year. On this basis, OP Pohjola will provide its owner-customers with better and clearer benefits than before. The goal of the renewal is to provide our owner-customers with a unique package of benefits. It also reflects a change in the taxation of financial sector bonuses, which will enter into force on 1 January 2026.

Our owner-customers will benefit even more from OP bonuses in the future: OP bonus accrual will be increased from its normal level and expanded to cover use of a wider range of OP Pohjola's services. In addition, customers will be free to choose how they use OP bonuses: for example, to pay banking and insurance service charges or invest in mutual funds. The more an owner-customer concentrates their banking and insurance service use with OP Pohjola, the more they benefit.

Business environment characterised by gradual recovery from turbulence during spring

Economic prospects are markedly brighter after the geopolitical tensions and trade-war threats of the first half of 2025. Whereas Q1–Q2 was marked by uncertainty, key economic surveys in the summer and early autumn were more hopeful. Growth is expected to remain steady but somewhat slower than the long-term average. As monetary policy eases, the global economy should gradually recover towards its average growth rate.

The euro area grew by 1.5% in the first half of 2025 and the growth outlook is relatively stable. Germany's recovery is particularly good news for Finland. Euro-area unemployment is at its lowest since the euro's introduction. Inflation in the euro area has settled at around 2%, where it is expected to remain for the next few years.

Although Finland's recovery stalled in the first six months of 2025, trust in the economy has risen above the euro area's average since then. Indicators suggest that the economy began to recover again in the second half, with GDP expected to grow at an average of almost 2% in 2026–2027. Exports are expected to grow at a rate of 3.2% this year.

Corporate investments are picking up and the construction sector is passing its lowest point. Defence spending and the forthcoming major icebreaker project will increase investment and spur GDP growth in Finland in the coming years.

Unemployment rose to around 10% in the summer of 2025. As the economy recovers, employment will start to rise and the unemployment rate to fall.

A pause in interest rate cuts is forecast, which will bring stability to the financial markets. By the end of September, the 12-month Euribor – the most commonly used reference rate for home loans – was 2.19%, which is 0.55 percentage points lower than a year earlier.

The equity markets have performed well since the sharp fall in stock prices in April. Equities have continued to rise in value in the autumn, buoyed by the positive economic outlook and technological development. At the end of September, world stock indexes were 16% higher – in dollar terms – than on 1 January, but euro-denominated returns remained at 1.6% due to the strong decline in the dollar's value. In Europe, stock markets rose by 9% and the Nasdaq Helsinki rose by 13% from the end of 2024.

OP Pohjola had a record quarter

OP Pohjola's operating profit for January–September 2025 was better than expected, totalling EUR 1,715 million. Although this is 12% lower than for the same period in 2024, the third-quarter operating profit was at a record level. This outstanding result was particularly due to the excellent insurance service result, the high-quality loan portfolio and consequent reversal of impairment loss on receivables, and high income from investment activities. Our strong profit performance enables us to continue providing our owner-customers with extremely competitive benefits.

OP Pohjola's income from customer business (net interest income, insurance service result and net commissions and fees) decreased by 6%, year on year, to EUR 2,559 million. Net interest income fell by 13% due to lower market rates. At EUR 602 million, net commissions and fees grew by 1%. The insurance service result grew by an impressive 90% to EUR 181 million.

Income from investment activities performed well and was EUR 426 million. However, this was 15% lower than the result for Q1–Q3 2024, due to the decrease in equity investment income in particular.

Totalling EUR 1,725 million, OP Pohjola's expenses in January–September were higher by 6% year on year, mainly due to higher investments in ICT development and increased personnel costs. The focus areas of our ICT development have been leveraging of AI on a broad basis, improvement of our data capabilities, and updating of our banking and insurance businesses' core systems. Despite the growth in costs, OP Pohjola's cost/income ratio remained highly competitive at 51%.

Of the three segments, the best performer was Corporate Banking, which had an operating profit of EUR 454 million in January–September, a year on year increase of 21%. Despite a 31% decrease, Retail Banking's operating profit of EUR 740 million was also very good. The segment's operating profit was particularly affected by falling market rates, which led to a reduction in net interest income. The Insurance segment's result was also good, despite the 6% year on year decrease in operating profit to EUR 429 million, which was particularly due to reduced income from investment activities. On the other hand, the insurance service result clearly outperformed Q1–Q3/2024, and the non-life insurance combined ratio improved to a very competitive 88%.

OP Pohjola's strong capital adequacy and excellent liquidity provide security in an uncertain business environment. At the end of September, the CET1 ratio was 21.0%, which exceeds the minimum regulatory requirement by 6.7 percentage points. OP Pohjola is one of the most financially solid large banks in Europe.

Its liquidity and funding position have remained at an excellent level. Strong capital adequacy, excellent liquidity and broad trust among customers and other stakeholders are vital both for banks and insurance companies. OP Pohjola is in great shape in all these respects.

OP Pohjola's loan portfolio and deposits clearly growing, with historically low credit risks

The deposit portfolio grew by 5% in the first three quarters of 2025, total deposits being EUR 79.8 billion at the end of September. In the year to date, household deposits grew by 6% to more than EUR 50 billion. OP Pohjola's market share of deposits in Finland has been growing markedly over the last couple of years.

OP Pohjola's loan portfolio grew by 2% year on year, to EUR 100.2 billion. New loans drawn down by customers during the reporting period totalled EUR 19.3 billion. With a market share of over 39%, OP Pohjola held onto its position as a strong, leading provider of home loans in Finland. Signs of recovery have emerged in the home loan market, supported by lower market interest rates and an increase in disposable household income. OP Pohjola's customers drew down EUR 4.3 billion in new home loans in January–September, almost 16% more than in Q1–Q3/2024. OP Pohjola's home loan customers have continued to repay their loans diligently.

Exceptionally, reversal of impairment loss on receivables came to EUR 46 million in January–September, whereas impairment losses of EUR 72 million were recognised for the same period in 2024. OP Pohjola's loan portfolio of more than EUR 100 billion is of excellent quality and its credit risks are tightly managed.

The strong increase in systematic mutual fund investment continued – there are already more than 1.5 million OP fund unitholders

Our customers showed more interest than before in systematically investing in funds, with 142,000 new systematic investment agreements being made during the reporting period, 16% more than in the same period last year. There are already more than 1.5 million OP mutual fund unitholders. Reaching almost EUR 102 billion in value, investment assets managed by OP Pohjola grew by 9% compared to January–September 2024.

OP Pohjola is focusing more than ever on its corporate customer business – we are spurring the growth of SMEs

Signs of a turnaround in demand for corporate financing emerged in the first half of 2025, as investments gradually started to increase. Demand also grew for working capital financing. In January–September, OP Pohjola's corporate loan portfolio grew by 1% from its level at the end of 2024, to exceed EUR 28 billion. There was also a clear reduction in non-performing exposures related to corporate loans.

OP Pohjola is Finland's largest provider of financing for companies – its market share of corporate lending is around 38%. Large corporations and SMEs are all extremely important customers for OP Pohjola. Strong capital adequacy, good profitability and the loan portfolio's excellent quality will enable us to reassess our corporate lending criteria.

We are ready to engage in a controlled increase of our risk-taking in corporate financing. In this way, we want to play our part in spurring corporate and economic growth in Finland. We are also further developing our SME financing process, so that we can lend as smoothly as possible to companies and projects that are eligible for financing.

OP Pohjola has a strong reputation and extremely competitive employer brand

OP Pohjola was ranked among the top ten best performers in Finland in a Reputation and Trust Analytics survey. We are the only provider of financial sector services to make the top ten. Having a reputation as a trusted institution is extremely important in the banking and insurance sector, reinforcing our basis for success in the future.

For the second time running, an employer brand performance survey by Universum ranked OP Pohjola as the most attractive employer among business professionals. Among IT professionals we came fourth, being ranked alongside international tech giants. These results strongly reflect our long-term work to foster a good employee experience. It is vital to our long-term competitiveness that OP Pohjola is regarded as an attractive place to work.

Artificial intelligence features strongly in OP Pohjola's updated strategy. AI competencies are a capability that will determine which financial sector companies succeed in the future. We believe that AI will boost our capabilities at work. Accordingly, to ensure that AI user skills develop across our organisation, we are providing every employee with the opportunity to use AI in their daily work. For example, Copilot has more than 11,000 active users in OP Pohjola and there were more than 50,000 individual signups for the 400 or so AI training sessions arranged in 2025. In addition, I believe that our focus on mastery of new tools and training in general have improved the employee experience.

My warm thanks to all our customers for the trust they have shown in OP Pohjola. We aim to continue being worthy of the confidence you place in us. Our employees and governing bodies also deserve a big thank you for their excellent work, which has enabled us to succeed extremely well again this year.

Timo Ritakallio
President and Group CEO

January–September

OP Pohjola's operating profit was EUR 1,715 million (1,948), down by 12.0% year on year. Income from customer business (net interest income, net commissions and fees and insurance service result) decreased by a total of 6.4% to EUR 2,559 million (2,733). The cost/income ratio weakened to 50.8% (44.6). New OP bonuses accrued to owner-customers increased by 4.7% to EUR 244 million.

As a result of lower market interest rates, net interest income decreased by 12.9% to EUR 1,776 million. Net interest income reported by the Retail Banking segment decreased by 17.4% to EUR 1,334 million and that by the Corporate Banking segment increased by 7.7% to EUR 445 million. OP Pohjola's loan portfolio grew by 2.2% to EUR 100.2 billion while deposits grew by 4.7% to EUR 79.8 billion, year on year. Household deposits increased by 5.5% year on year, to EUR 50.4 billion. New loans drawn down by customers during the reporting period totalled EUR 19.3 billion (15.0).

Impairment loss on receivables reversed came to EUR 46 million, particularly due to a better financial situation among customers. A year ago, impairment loss on receivables totalled EUR 72 million. Final credit losses totalled EUR 69 million (38). At the end of the reporting period, loss allowance was EUR 710 million (824), of which management overlay accounted for EUR 60 million (77). Non-performing exposures decreased, accounting for 2.1% (2.9) of total exposures. Impairment loss on loans and receivables accounted for -0.06% (0.10) of the loan and guarantee portfolio.

Net commissions and fees grew by 0.5% to EUR 602 million. Payment transfer net commissions and fees increased by EUR 4 million to EUR 179 million. Net commissions and fees of real estate agency services fell by EUR 5 million to EUR 38 million.

Insurance service result grew by 90.1% to EUR 181 million. Insurance service result includes EUR 400 million (387) in operating expenses. Non-life insurance net insurance revenue, including the reinsurer's share, grew by 3.5% to EUR 1,345 million. Net claims incurred after the reinsurer's share decreased by 8.6% to EUR 785 million. The combined ratio reported by non-life insurance improved to 88.1% (95.0).

Investment income (net investment income, net insurance finance expenses and income from financial assets held for trading) decreased by a total of 14.5% to EUR 426 million. Income from investment activities decreased due to lower income from equity investments than a year ago. Net investment income together with net finance expenses describe investment profitability in the insurance business. The combined return on investments at fair value of OP Pohjola's insurance companies was 3.0% (6.4).

Net income from financial assets recognised at fair value through profit or loss, or notes and bonds, shares and derivatives, totalled EUR 904 million (1,605). Net income from investment contract liabilities totalled EUR -435 million (-689). Net insurance finance expenses totalled EUR 185 million (565).

In banking, net income from financial assets held for trading came to EUR 136 million (123) as a result of changes in the value of derivatives.

Other operating income totalled EUR 8 million (31). A EUR 23 million valuation adjustment in patient insurance policies with full risk for own account decreased other operating income.

Total expenses grew by 5.9% to EUR 1,725 million. Personnel costs rose by 4.2% to EUR 814 million. The increase was affected by headcount growth and pay increases. OP Pohjola's personnel increased by almost 600 year on year. The number of employees increased in areas such as sales, customer service, service development, risk management and compliance. Cancelling the transfer of the earnings-related supplementary pension liability decreased personnel costs by EUR 20 million. Depreciation/amortisation and impairment loss on PPE and intangible assets decreased by 10.3% to EUR 96 million. Other operating expenses increased by 9.9% to EUR 815 million. ICT costs totalled EUR 427 million (372). Development costs were EUR 302 million (249) and capitalised development expenditure EUR 40 million (43). Charges of financial authorities were EUR 1 million (1). The EU's Single Resolution Board (SRB) does not collect stability contributions from banks for 2025.

At EUR 236 million (227), OP bonuses for owner-customers are included in earnings and are divided under the following items based on their accrual: EUR 116 million (118) under interest income, EUR 68 million (61) under interest expenses, EUR 39 million (36) under commission income from mutual funds, and EUR 12 million (12) under the insurance service result.

Income tax amounted to EUR 345 million (388). The effective tax rate for the reporting period was 20.1% (19.9). Comprehensive income after tax totalled EUR 1,462 million (1,664).

OP Pohjola's equity amounted to EUR 19.2 billion (18.1). Equity included EUR 3.1 billion (3.3) in Profit Shares, terminated Profit Shares accounting for EUR 0.3 billion (0.4).

OP Pohjola's funding position and liquidity are strong. OP Pohjola’s LCR was 193% (193) and NSFR was 131% (129).

Outlook

Economic confidence has increased since trade policy uncertainty has diminished. On the other hand, the higher tariffs will impact negatively on the economic outlook in the near future. The escalation of geopolitical crises or a rise in trade barriers may affect capital markets and the economic environment of OP Pohjola and its customers.

OP Pohjola's operating profit in 2025 is expected to be at the same level or higher than in 2023, when it was EUR 2,050 million.

The main uncertainties affecting OP Pohjola's earnings performance are associated with developments in the business environment, changes in the investment environment and developments in impairment loss on receivables. Forward-looking statements in this Interim Report expressing the management's expectations, beliefs, estimates, forecasts, projections and assumptions are based on the current view on developments in the economy, and actual results may differ materially from those expressed in the forward-looking statements.

Press conference

OP Pohjola’s financial performance will be presented to the media by President and Group Chief Executive Officer Timo Ritakallio in a press conference on 28 October 2025 at 11am at Gebhardinaukio 1, Vallila, Helsinki.

Media enquiries: OP Pohjola Communications, tel. +358 10 252 8719, viestinta@op.fi

OP Corporate Bank plc and OP Mortgage Bank plc will publish their own interim reports.

Financial reporting

Schedule for financial reports in 2025:

Schedule for financial reports in 2026:

Helsinki, 28 October 2025

OP Osuuskunta
Board of Directors

For additional information, please contact:

Timo Ritakallio, President and Group CEO, tel. +358 10 252 4500
Mikko Timonen, Chief Financial Officer, tel. +358 10 252 1325
Piia Kumpulainen, Chief Communications Officer, tel. +358 10 252 7317

DISTRIBUTION:
Nasdaq Helsinki Ltd
Euronext Dublin (Irish Stock Exchange)
London Stock Exchange
Major media
op.fi

OP Pohjola is Finland’s largest provider of financial services, with more than two million owner-customers and over 14,000 employees. We provide a comprehensive range of banking and insurance services for personal and corporate customers. OP Pohjola consists of OP cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. Our mission is to promote the sustainable prosperity, security and wellbeing of our owner-customers and operating region. Together with our owner-customers, we have been building Finnish society and a sustainable future for over 120 years now. www.op.fi

Attachment

• OP Pohjola's Interim Report Q3 2025