Report by the Board of Directors for 2013

  • Consolidated earnings before tax amounted to EUR 473 million (372) and consolidated earnings before tax at fair value to EUR 456 million (790). Return on equity was 14.6% (11.2) and, excluding the effect of a reduction in the corporate tax rate, 12.4%
  • The Core Tier 1 ratio was 11.3% (10.6) and the pro-forma Common Equity Tier 1 (CET1) under CRD IV/CRR was 11.9%.
  • The Banking loan portfolio increased by 5%. The average margin on the corporate loan portfolio improved to 1.57% (1.52). Impairment loss on receivables decreased to EUR 35 million (54) and the bank levy reduced earnings by EUR 17 million (–).
  • Within Non-life Insurance, insurance premium revenue increased by 11% (10). The combined ratio improved to 91.6% (97.1). A reduction in the discount rate for pension liabilities decreased earnings by EUR 38 million (52). Excluding changes in reserving bases and amortisation on intangible assets arising from company acquisition, the operating combined ratio was 86.9% (90.5). Return on investments at fair value was 3.5% (10.8).
  • Within Asset Management, assets under management increased by 16% to EUR 37.9 billion (32.8). Performance-based management fees amounted to EUR 4 million (15).
  • Year on year, total expenses grew by 2%, or EUR 11 million, including the bank levy of EUR 19 million. Cost savings out of the EUR 25 million estimated for 2013 based on the efficiency-enhancement programme amounted to EUR 27 million.
  • The Board of Directors proposes a dividend per share of EUR 0.67 (0.46) payable on Series A shares and EUR 0.64 (0.43) on Series K shares. This means a dividend payout ratio of 50%.
  • Outlook for 2014: Consolidated earnings before tax in 2014 are expected to be higher than in 2013. In Banking, growth in the loan portfolio is expected to be at the same level as in 2013. Non-life Insurance’s operating combined ratio is expected to vary between 87 and 91%. Detailed information on the outlook, see “Outlook for 2014” below.
  • On 17 December 2013, the Finnish Parliament adopted the reduction of the corporate tax rate from 24.5% to 20% as of 1 January 2014. This change improved Pohjola’s consolidated earnings after tax by EUR 65 million.

 

Earnings before tax


Million EUR 2013 2012 Change, %
Banking 251 221 13
Non-life Insurance 167 92 82
Asset Management 24 32 -27
Group Functions 32 27 18
Total 473 372 27
Change in fair value reserve -17 418
Earnings before tax at fair value 456 790 -42

Earnings per share, EUR 1.33 0.89
Equity per share, EUR 9.52 8.67
Average personnel 2,580 3,421

 


Financial targets



2013 2012 Target
Return on equity, % 14.6 11.2 13
Core Tier 1, % 11.3 10.6 ≥ 11
Operating cost/income ratio by Banking, % 36 34 < 35
Operating combined ratio by Non-life Insurance, % 86.9 90.5 < 92
Operating expense ratio by Non-life Insurance, % 18.7 21.5 18
Solvency ratio by Non-life Insurance, % 73 81 70
Operating cost/income ratio by Asset Management, % 53 47 < 45
Total expenses in 2015 at the same level as at the end of 2012 580 569 569
AA rating affirmed by at least two 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% 50* 51 ≥ 50

* Board proposal

 
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