OP Mortgage Bank: Half-year Financial Report for 1 January–30 June 2025

Core Insights - OP Mortgage Bank (OP MB) reported stable financial standing with a total bond issuance of EUR 15.8 billion as of June 2025, consistent with the previous year [2][4] - The company issued its first covered bond of the year in April 2025, amounting to EUR 1 billion with a maturity of five years and three months, all proceeds were allocated to 38 OP cooperative banks [4][38] - OP MB's Common Equity Tier 1 (CET1) ratio was reported at 374.1%, a decrease from 797.0% due to an increase in total risk exposure amount following regulatory changes [8][13] Financial Standing - Total bonds issued by OP MB reached EUR 15.8 billion, with intermediary loans from OP MB to 75 cooperative banks also totaling EUR 15.8 billion [2] - Operating profit for the reporting period was EUR 2.9 million, down from EUR 4.4 million in the previous year [4] Capital Adequacy - CET1 capital stood at EUR 364.7 million, fully covering the capital requirements, which include a minimum CET1 capital requirement of 4.5% and a capital conservation buffer of 2.5% [8][11] - The total risk exposure amount increased significantly to EUR 97.5 million from EUR 45.8 million, primarily due to changes in the regulatory framework [12][14] Collateralisation of Bonds - The cover pool for the Euro Medium Term Covered Bond (Premium) Programme included EUR 8.1 billion in loans as collateral, exceeding the minimum overcollateralisation requirements [6][7] - OP MB's MREL ratio was reported at 374% of the total risk exposure amount, indicating a strong buffer above the required levels [17] Sustainability and Corporate Responsibility - OP Financial Group has committed to sustainability reporting in line with the European Sustainability Reporting Standards (ESRS) [26] - The Group's sustainability programme focuses on climate, community, and corporate governance, aiming for a net positive impact on nature by 2030 [27][28] Personnel and Governance - OP MB had six employees at the end of the reporting period, with key support services being digitized and sourced from OP Cooperative and its subsidiaries [31] - The governing body includes a Chair and several members from OP Cooperative and OP Corporate Bank, ensuring strong oversight [32] Risk Profile - OP MB maintains a strong capital base and risk-bearing capacity, with credit risk exposure remaining stable [33][34] - The liquidity coverage ratio (LCR) for OP Financial Group was reported at 213%, indicating robust liquidity management [35]