Pohjola Pankki Oyj : Pohjola Bank plc Financial Statements Bulletin for 1 January-31 December 2012

  Pohjola Pankki Oyj : Pohjola Bank plc Financial Statements Bulletin for 1
                           January-31 December 2012

Pohjola Bank plc
Stock exchange release, 6 February 2013, 8.00 am
Financial Statements Release

Pohjola Bank plc Financial Statements Bulletin for 1 January-31 December 2012

Pohjola Group in 2012

- Consolidated earnings before tax came to EUR 374 million (258) and
consolidated earnings before tax at fair value amounted to EUR 792 million
(78). Return on equity stood at 11.2% (9.2) and return on equity at fair value
was 23.3% (3.1). Core Tier 1 ratio stood at 10.6% (10.3).
- Earnings before tax recorded by Banking improved to EUR 222 million (199).
These included EUR 54 million (49) in impairment charges on receivables. The
loan portfolio increased by 9% from its level on 31 December 2011. The average
corporate loan portfolio margin stood at 1.52% (1.34).
- Within Non-life Insurance, insurance premium revenue rose by 10%. The
combined ratio was 97.1% (97.7). Excluding the changes in reserving bases and
amortisation on intangible assets arising from company acquisition, the
operating combined ratio stood at 90.5% (89.8). Return on investments at fair
value was 10.8% (-0.4).
- Earnings before tax posted by Asset Management amounted to EUR 32 million
(27) and assets under management were EUR 32.7 billion (31.3) at the end of
the financial year.
- The Board of Directors proposes that a per-share dividend of EUR 0.46 (0.41)
be paid on Series A shares and EUR 0.43 (0.38) on Series K shares. This means
a dividend payout ratio of 51%.
- Outlook for 2013: Consolidated earnings before tax in 2013 are expected to
be higher than in 2012. It is estimated that Non-life Insurance's operating
combined ratio will vary between 89 and 93%. For more detailed information on
the outlook, see "Outlook for 2013" below.

October-December
- Consolidated earnings before tax came to EUR 92 million (13) and
consolidated earnings before tax at fair value amounted to EUR 186 million
(13). Return on equity was 10.1% (5.6).
- Earnings of EUR 59 million (64) before tax posted by Banking included EUR 20
million (13) in impairment charges on receivables. The loan portfolio
increased by 2% and the average margin of the corporate loan portfolio rose by
4 basis points.
- Within Non-life Insurance, insurance premium revenue rose by 13%. The
combined ratio stood at 97.2% (116.9) while the operating combined ratio was
95.3% (91.0). Return on investments at fair value was 2.0% (1.4).
- Earnings before tax reported by Asset Management improved to EUR 16 million
(8) as a result of vigorous growth in performance-based fees.
- As a result of the procedures of information and consultation of employees
under the Finnish Act on Co-operation within Undertakings, Pohjola decided to
cut 281 jobs, outsource 22 jobs and 618 employees will join the payroll of
other companies within OP-Pohjola Group Central Cooperative Consolidated.

Earnings before tax, EUR million   2012  2011 Change, %   Q4/    Q4/ Change, %
                                                      2012   2011
 Banking                           222   199        12    59     64        -7
 Non-life Insurance                 92     8              10    -63
 Asset Management                   32    27        19    16      8       104
 Group Functions                    28    24        15     8      5        62
Total                               374   258        45    92     13       611
Change in fair value reserve        418  -180              94      0
Earnings before tax at fair value   792    78             186     13
Earnings per share, EUR           0.89  0.67            0.22   0.10
Equity per share, EUR              8.67  7.22
Average personnel                 3,421 3,189           3,353  3,411
                                                    Q4/   Q4/ Target
Financial targets                  2012  2011      2012  2011
Return on equity, %                11.2   9.2      10.1   5.6   13.0
Core Tier 1 ratio, %               10.6  10.3                 >11.0
Operating cost/income ratio by
Banking, %                           34    35        29    32   < 35
Operating combined ratio by
Non-life Insurance, %              90.5  89.8      95.3  91.0   < 92
Operating expense ratio by
Non-life Insurance, %              21.5  21.8      20.6  25.6     18
Solvency ratio by Non-life
Insurance, %                         81    77                     70
Operating cost/income ratio by
Asset Management, %                  47    49        36    49   < 45
AA rating affirmed by at least
two credit rating agencies or
credit ratings at least at the
main competitors' level               2     2                      2
Dividend payout ratio at least
50%, provided that Core Tier 1
ratio remains at least 10%        51 *)    60                   >50
*) Board proposal

President and CEO Mikael Silvennoinen:

Pohjola Group showed record earnings for 2012 - much better than a year ago.
Consolidated earnings before tax amounted to EUR 374 million and at fair value
to almost EUR 800 million. Group earnings grew most in Non-life Insurance,
aided by good investment performance. Banking and Asset Management reported
better financial results than a year ago, rising to record levels.

Our fourth-quarter consolidated earnings before tax came to EUR 92 million.
Fourth-quarter net interest income decreased over the previous year and over
the previous quarters of 2012. Our solid profit performance during the fourth
quarter was based on strong growth in net commissions and fees and the
levelling off of the upward trend in Group costs.

Pohjola Group strengthened its market position during 2012. Annual growth in
the corporate loan portfolio was brisk. The average corporate loan portfolio
margin increased, standing at 1.52% at the turn of the year. Insurance premium
revenue showed a strong increase, accelerating during the fourth quarter.
Asset Management was successful in investment operations in terms of both
institutional clients and mutual funds.

During the fourth quarter, the Group completed the procedures for Information
and Consultation of Employees initiated in the early autumn and related to the
reorganisation programme of OP-Pohjola Group Central Cooperative Consolidated.
As a result, the number of Pohjola Group's employees will reduce considerably.
The reorganisation will enable us to significantly improve the Group's
cost-efficiency, with a view to ensuring our competitiveness and service
capabilities in the future too.

Outlook for 2013

Within Banking, growth prospects on the loan portfolio are dimmer than last
year. The operating environment for the corporate sector will remain
challenging. The greatest uncertainties related to Banking's financial
performance in 2013 are associated with future impairment loss on the loan
portfolio.

On 28 December 2012, the Finnish Parliament passed a bill on a temporary bank
tax. This tax accounts for 0.125% of risk-weighted assets, which means that
Pohjola will incur additional non-deductible expenses of around EUR 19 million
in 2013.

Insurance premium revenue is expected to increase at an
above-the-market-average rate. The operating combined ratio for the full year
2013 is estimated to vary between 89% and 93% if the number of large claims is
not much higher than in 2012. Expected investment returns are largely
dependent on developments in the investment environment. The most significant
uncertainties related to Pohjola Insurance's financial performance in 2013
pertain to the investment environment and the effect of large claims on claims
expenditure.

The greatest uncertainties related to Asset Management's financial performance
in 2013 are associated with the actual performance-based fees tied to the
success of investments and the amount of assets under management.

The key determinants affecting the Group Functions' financial performance
include net interest income arising from assets in the liquidity buffer, any
capital gains or losses on notes and bonds and any impairment charges that may
be recognised on notes and bonds in the income statement. It is estimated
that the Group Functions' net interest income will be lower than in 2012.

Consolidated earnings before tax in 2013 are expected to be higher than in
2012.

There is still great uncertainty about the economic outlook and the operating
environment.

All forward-looking statements in this report expressing the management's
expectations, beliefs, estimates, forecasts, projections and assumptions are
based on the current view of the future development in the operating
environment and the future financial performance of Pohjola Group and its
various functions, and actual results may differ materially from those
expressed in the forward-looking statements.

Helsinki, 6 February 2013
Pohjola Bank plc
Board of Directors

This Financial Statements Bulletin is available at www.pohjola.com > Media >
Releases, where background information on the Bulletin can also be found.

Analyst meeting, conference call and live webcast

Pohjola will hold a briefing in English for analysts and investors on 6
February starting at 3.00 pm Finnish time, EET (2.00 pm CET, 1.00 pm UK time,
8am US EST). The briefing is a combined analyst meeting, conference call and
live webcast.

Analysts and investors may attend the briefing in one of the following two
ways:
1) By viewing the briefing as live webcast via the internet. The link will be
available on the IR website before the briefing begins. Questions on the
internet are welcome via a question button available in the webcast window. An
on-demand webcast of the briefing can be viewed via the IR website afterwards.

2) By dialling one of the regional conference call numbers shown below.
Questions are welcome by telephone in the Q&A session according to
instructions. To participate via a conference call, please dial in 5-10
minutes before the beginning of the event:

FI: 09 23 11 328
US: 1 86 6682 8490
UK: 08 445 718 957
International: +44 (0) 1452 555131
Password: Pohjola

Press conference

Mikael Silvennoinen, Pohjola Bank plc's President and CEO, will present the
financial results in a press conference on OP-Pohjola Group's premises
(Vääksyntie 4, Vallila, Helsinki), on 6 February, starting at noon

Annual General Meeting

Pohjola Bank plc will hold its Annual General Meeting (AGM) in the Congress
Wing of the Helsinki Exhibition & Convention Centre (Messuaukio 1, Helsinki)
on Friday 22 March 2013, starting at 2.00 pm. Proposals by the Board of
Directors to the AGM will be published as a company release on 6 February 2013
and notice of the Meeting on 18 February 2013. The notice will also appear in
Helsingin Sanomat and Hufvudstadsbladet on 19 February 2013. Thereafter, the
Report by the Board of Directors and the Financial Statements and other AGM
documentation will also be available on the company's website at
www.pohjola.com.

Financial reporting in 2013

Schedule for Interim Reports in 2013:
Interim Report Q1/2013: 2 May 2013
Interim Report H1/2013: 31 July 2013
Interim Report Q1-3/2013: 30 October 2013

DISTRIBUTION

NASDAQ OMX Helsinki Ltd
London Stock Exchange
SIX Swiss Exchange
Major media
www.pohjola.com, www.op.fi   

For additional information, please contact

Mikael Silvennoinen, President and CEO, tel. +358 (0)10 252 2549
Vesa Aho, CFO, tel. +358 (0)10 252 2336
Niina Pullinen, Senior Vice President, Investor Relations, tel. +358 (0)10 252
4494

Pohjola Bank plc is a Finnish financial services group which provides its
customers with banking, non-life insurance and asset management services. Our
mission is to promote the prosperity, security and wellbeing of our customers.
Profitable growth and an increase in company value form our key objectives.
Pohjola Group serves corporate customers in Finland and abroad by providing an
extensive range of financial, investment, cash-management and non-life
insurance services. We offer non-life insurance and private banking services
to private customers. Pohjola Series A shares have been listed on the Large
Cap List of the NASDAQ OMX Helsinki since 1989. The number of shareholders
totals around 32,000. Pohjola's consolidated earnings before tax came to 374
million euros in 2012 and the balance sheet total amounted to 45 billion euros
on 31 December 2012. Pohjola is part of OP-Pohjola Group, the leading
financial services group in Finland with over four million customers.



www.pohjola.com

Pohjola_Q4_2012_results
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