Core Insights - OP Financial Group reported an operating profit of EUR 990 million for the first half of 2025, a decrease of 19% year on year, primarily due to a decline in net interest income [3][12][34] - The business environment was characterized by geopolitical tensions and trade-policy uncertainty, impacting overall economic forecasts [6][7][12] - Despite challenges, the Group maintained strong capital adequacy with a CET1 ratio of 20.8%, exceeding regulatory requirements [14][45] Financial Performance - Operating profit decreased by 19.5% to EUR 990 million compared to EUR 1,229 million in H1 2024 [4][34] - Total income fell by 10.9% to EUR 2,139 million, while total expenses increased by 5.8% to EUR 1,169 million [4][43] - The cost/income ratio worsened to 54.6% from 46.0% in the previous year [4][34] Segment Performance - Retail Banking's operating profit decreased by 31.4% to EUR 489 million, with net interest income down by 17% [4][20] - Corporate Banking's operating profit increased by 25.5% to EUR 309 million, with net interest income growing by 9% [4][20] - The Insurance segment's operating profit fell by 30.7% to EUR 185 million, despite an 83% increase in the insurance service result [4][20][38] Customer Business and Loans - Income from customer business decreased by 7% to EUR 1,665 million, driven by a 12% decline in net interest income [3][16] - The loan portfolio grew by 2% year on year to EUR 99.7 billion, with new loans drawn down totaling EUR 13.1 billion [4][22][35] - Deposits increased by 7.5% to EUR 81.0 billion, with household deposits rising by 5% [4][21][35] Investment and Insurance - Investment income decreased by 36% to EUR 206 million, primarily due to lower equity investment income [3][17][39] - Non-life insurance premiums written grew by 5%, while claims expenditure decreased by 8% year on year [28] Outlook - The operating profit for 2025 is expected to be good but lower than in 2023 and 2024, with uncertainties related to the business environment and interest rates [47][48]

US-China Trade Relations - The US expressed concerns about China's global overcapacity and purchases of sanctioned Iranian oil, which account for approximately 90% of Iran's oil sales [2] - The US also expressed concerns about China selling approximately $15 billion of dual-use technologies to Russia [2] - The US reiterated its trade policy goals of reducing US deficits, increasing manufacturing, and reshoring the economy [3] - The US aims to "derisk" rather than "decouple" from China, focusing on strategic industries like rare earths, semiconductors, and medicines [5] - Discussions included accelerating the flow of rare earth magnets from China to US companies [4] - China had previously blocked all of their rare earth magnets, but now the US is receiving them [17] Trade Imbalances and Tariffs - China's economy is described as the most unbalanced in modern times, with 30% of global manufacturing and a 2% current account surplus of global GDP [13] - The US is tracking an annual trade deficit with China, but it is expected to be at least $50 billion smaller this year [15] - Section 232 investigations on pharmaceuticals and semiconductors will be applied globally, without targeting any specific country [16] - Potential tariffs on countries buying sanctioned Russian oil could range from 0% to 500%, with the US Senate considering a bill to grant the president discretion to apply secondary tariffs [37] Potential Tariff Pause and Future Discussions - A potential pause on tariff increases is under discussion, with a possible duration of 90 days [9][42] - If the pause is not extended, tariffs could revert to a 34% level, potentially reaching 80-85% depending on the product [18][20] - Further technical discussions are ongoing between the US and Chinese teams [10] - A phone call between President Xi and President Trump occurred in June, during which President Xi invited President Trump to Beijing [22][23] US Economic Outlook - The US economy is performing well, with the biggest downturn in inflation in four years observed in May [33][34] - The US is expected to receive a minimum of $300 billion in tariff income this year, representing 1% of GDP [41]

Trade Negotiation Strategy - The US president aims for completely open markets in trade deals, rejecting initial offers and pushing for higher levels of market access [1] - The US president seeks to rectify what he views as unfair and asymmetric trade practices of the past 80 years, prioritizing the ability of Americans to sell goods overseas [2] - The US president sets the terms and conditions for trade agreements, indicating a unilateral approach to negotiations [2] International Trade Relations - Other countries initially offered market access concessions, such as 50% or 30%, which were deemed insufficient by the US president [1] - Some countries have been slow to meet the US president's expectations regarding trade openness [3] - The US president's approach has significantly impacted the global trade landscape within a short timeframe of six months [4] Decision-Making Process - The US president ultimately decides whether to pursue trade deals with individual countries like India, based on the offers presented [3]

All right, 15% tariffs on our biggest trading partner. Um, I was at the New York Stock Exchange in recent weeks. A lot of people were saying to me essentially 15%, that's the new zero. It seems to be a number that's palatable to the market.Do you agree with this idea that the market can continue to move higher and that businesses can move with a certain degree of certainty with 15% tariffs. >> That's the big question. Uh, 15% looks like the baseline.Um, and that's that's the big question. Have we reached th ...

Tariff Negotiations & Trade Agreements - The US administration aims for tariff-free exports to partner countries, focusing on reciprocal tariffs which have decreased from approximately 50% to 20% in recent agreements [2] - Agreements are facing obstacles in the "third bucket," involving transactions like Japan's $500 billion investment in the US and financing investments in Vietnam, potentially leading to higher tariffs if unresolved [2][3] - The US administration is using threats to increase negotiating leverage, which has been effective, but the EU and China are experiencing tensions during their summit, potentially impacting US-China negotiations [4][5] - The EU's concerns about trade with China are as strong as the US's, making agreements challenging due to the need for consensus among many countries [5][6] - The reciprocal tariffs have been reduced by about 50% in the last four frameworks [13] - Key countries to watch include the EU, Korea, and India, as they significantly impact the deficit, economy, and global economy [13] - A resolution is expected, but if one of the three key countries (EU, Korea, India) doesn't reach an agreement, reciprocal tariffs may be implemented, though likely not for long [14][15] Legal & Policy Considerations - Country-specific tariffs are being challenged in court, potentially impacting the president's trade policy, but the US is expected to find ways to exert its position on tariffs and trade [8][9][10] - Countries should assume the US president will have the legal leeway needed to move forward, as past challenges have been overcome through measures like invoking national security under Section 232 [10][11]

Trade Agreement & Market Sentiment - Japan is committed to invest approximately $500 billion, though details are limited [1] - A new deal deadline of August 1st could reduce market uncertainty [2] - The Yen might strengthen, potentially making Japan a more attractive market for both domestic and US investors [3] - Investors are fairly sanguine, with some complacency evident [6] Investment Strategy & Diversification - International diversification, particularly in developed markets including Japan, is favored over emerging markets due to inherent risks [4] - Global diversification can accrue benefits compared to focusing solely on the US market [5] Recession & Market Risk - Bond traders and investors are considering the possibility of a recession [9] - Recession risk remains, especially if the labor market weakens [10] - There's increased risk due to potential negative catalysts, given the current complacency [8]

Trade Policy & Strategy - The Trump administration's trade policy is characterized by inconsistency, including tariff delays, unreleased deals, and contradictions between the President and his staff [1][2] - The administration initially imposed reciprocal tariffs, then paused them, and subsequently extended the deadline, creating uncertainty [2] - The administration's messaging on trade deals is inconsistent, with negotiators finalizing deals that the President later seeks to improve [3][4] - The administration aims to expedite trade negotiations, potentially leading to both gains and risks for the overall trade agenda [6] Tariffs & Deadlines - Reciprocal tariffs were initially imposed around April 2nd, then paused for 90 days, with a deadline set for July 9th, which was later extended [2] - The new deadline for tariffs was set for August 1st [2][5] Negotiation Tactics - The administration uses letters posted on Truth Social to announce tariff rates, while also suggesting potential adjustments based on how the US is treated [5] - The administration's approach aims to accelerate negotiations and potentially extract more concessions from other nations [6]

The outlook for trade policy remains in flux to start the week, as the European Union and Mexico become the latest to face new, higher tariffs from U.S. President Donald Trump. https://t.co/dOeLDbzYQg ...

Trade and Tariffs - Potential new tariffs on the EU and Mexico starting August 1st are being considered, primarily as a negotiating tactic to achieve broader policy goals beyond just trade [1][5] - The market impact of these potential tariffs on European markets has been limited, possibly because investors view them as temporary threats [3] - The shift from free trade to "friend trade" reflects a broader strategy of prioritizing close relationships in global trade [2] Earnings and Market Outlook - Earnings season is approaching, with a positive outlook expected later in the year, potentially boosted by a 10%+ move in the dollar [7] - AI is expected to drive cost reduction and margin improvement for smaller companies, potentially starting next year [8][11] - Tech and communication services are driving most of the earnings growth; without them, overall earnings growth would be negative [9] Investment Opportunities - Smaller value companies outside the Mag 7, trading at 13-14 times earnings, may benefit from AI adoption [11] - In Europe, investment opportunities exist in defense and infrastructure sectors due to increased spending [13][14] - In Asia, tech-oriented markets are preferred over goods-dependent markets due to potential tariff impacts [16][17] Market Valuation - The Mag 7 stocks are trading at approximately 31 times forward earnings, while the rest of the market is just under 21 times [9] - The earnings growth spread between the Mag 7 and the rest of the market is compressing, suggesting potential outperformance of smaller caps [10][11]

The big-bank earnings reports due this week mark the quasi-official start to the second-quarter earnings season. Analysts expect growth, but they’re also eyeing the effects of tariffs as President Donald Trump’s trade policy continues to evolve. https://t.co/8UsIstnwYB ...