OP Financial Group's Interim Report for 1 January–31 March 2025: OP Financial Group reports a good first quarter in an uncertain operating environment

Core Insights - OP Financial Group reported a strong operating profit of EUR 423 million for Q1 2025, despite a 31.4% decrease compared to the same period in 2024, reflecting challenges in the operating environment [2][13][32] - The economic outlook remains uncertain due to geopolitical tensions and trade wars, with GDP growth in Finland projected at 1% for the year [9][10][48] Financial Performance - Total income decreased by 17.1% to EUR 989 million, while total expenses increased by 10% to EUR 590 million, leading to a weakened cost/income ratio of 60% [2][17][32] - Net interest income fell by 11% to EUR 631 million, with Retail Banking experiencing a 17% decline [4][33] - The Corporate Banking segment saw an operating profit increase of 13% to EUR 145 million, while the Insurance segment reported an operating loss of EUR -14 million [18][32] Business Segments - Retail Banking's operating profit decreased by 23% to EUR 291 million, with a 4% increase in deposits to EUR 64 billion [4][18] - Corporate Banking's loan portfolio grew by 1% to EUR 28.2 billion, with deposits increasing by 14% [4][18] - The Insurance segment's service result improved to EUR 2 million, but investment income plummeted by 88% to EUR 19 million [4][16] Customer Engagement and Initiatives - OP Financial Group increased OP bonuses for owner-customers by 40% compared to 2022, providing significant value during economically challenging times [13][32] - The number of systematic investment agreements increased by 22%, indicating strong customer interest in long-term investments [22][23] Capital and Liquidity - The CET1 ratio stood at 20.0%, exceeding the minimum regulatory requirement by 6.9 percentage points, indicating strong capital adequacy [14][42] - The liquidity position remains robust, with a liquidity coverage ratio (LCR) of 202% [42] Market Trends - The loan portfolio grew by 1% year-on-year to EUR 99.1 billion, with deposits increasing by 5% to EUR 77.5 billion [19][20] - The ratio of non-performing exposures decreased to 2.5%, reflecting improved credit quality [21][34] Outlook - The operating profit for 2025 is expected to be good but lower than in 2023 and 2024, amid a challenging economic environment [48][49]