OP Mortgage Bank Half-year Financial Report 1 January–30 June 2025 Stock Exchange Release 30 July 2025 at 10.00 EEST OP Mortgage Bank: Half-year Financial Report for 1 January–30 June 2025 OP Mortgage Bank (OP MB) is the covered bond issuing entity of OP Financial Group. Together with OP Corporate Bank plc, its role is to raise funding for OP Financial Group from money and capital markets. Financial standing At the end of June, bonds issued by OP MB totalled EUR 15,800 million (14,800)* and 75 OP cooperativ ...

Core Viewpoint - OP Corporate Bank plc reported a significant increase in operating profit and total income for the first half of 2025, indicating strong financial performance and growth in various segments [4]. Financial Performance - Operating profit increased by 38% to €300 million compared to €218 million in H1 2024 [4]. - Total income grew by 11% to €422 million from €380 million in the same period last year [4]. - Net interest income rose by 13% to €286 million, while investment income increased to €72 million [4]. - Net commissions and fees decreased by 12% to €33 million [4]. - Other operating income saw a significant increase of 63% to €30 million [4]. - Operating expenses remained stable at €147 million [4]. - The cost/income ratio improved to 34.9% from 38.6% [2][4]. Segment Performance - Corporate Banking and Capital Markets segment's operating profit increased by 20% to €182 million [4]. - Asset and Sales Finance Services and Payment Transfers segment's operating profit surged by 46% to €105 million [4]. - The Baltics segment maintained an operating profit of €19 million, with a slight increase in net interest income [4]. - Group Functions segment reported an operating loss of €6 million, an improvement from a loss of €25 million a year ago [4]. Balance Sheet and Ratios - The loan portfolio grew by 4.1% to €28.5 billion, while the deposit portfolio increased by 19.5% to €17.6 billion [4][5]. - The CET1 ratio remained stable at 14.0%, exceeding the minimum regulatory requirement by 4.6 percentage points [5][4]. - The ratio of non-performing exposures to total exposures improved to 1.4% from 2.2% [5]. Outlook and Market Conditions - The company anticipates that uncertainties in the business environment, interest rate changes, and impairment losses will affect future earnings performance [7]. - The preliminary tariff agreement between the US and EU is expected to enhance economic confidence, although higher tariffs may pose risks [5].

Financial Performance Highlights - KB Financial Group's 1H25 net profit reached ₩3.436 trillion, a 23.8% year-over-year increase[12, 17] - The Group's ROE for 1H25 was 13.03%, a 2.23%p increase year-over-year[8, 14] - Non-bank subsidiaries contributed 39% to the Group's net profit[16, 17] Shareholder Returns - The company plans a total shareholder return of ₩1.15 trillion, including a ₩850 billion share buyback and cancellation[8] - A proactive return of ₩300 billion was implemented in 2Q25[8, 11] - The CET-1 ratio as of June 2025 reached 13.74%[8, 11] Financial Analysis - Group net interest income slightly decreased by 0.4% year-over-year to ₩6.3687 trillion[24] - Group net non-interest income increased by 10.9% year-over-year to ₩2.7233 trillion[29] - Group G&A expenses increased by 4.1% year-over-year to ₩3.3553 trillion[35] Asset Quality - The Group's NPL ratio was 0.72%, with an NPL coverage ratio of 138.5%[48] - Provision for credit losses totaled ₩1.3107 trillion in 1H25, a 33.6% increase year-over-year[41] Subsidiary Performance - KB Kookmin Bank reported a net profit of ₩2.1876 trillion and an ROE of 11.63%[84] - KB Securities recorded a net profit of ₩338.9 billion and an ROE of 10.10%[87] - KB Insurance's net profit was ₩558.1 billion with an ROE of 20.51%[90]

Financial Standing - OP Mortgage Bank (OP MB) reported intermediary loans and bonds issued totaling EUR 14,800 million at the end of March 2025 [2][3] - The operating profit for the period was EUR 1.7 million, a decrease from EUR 2.3 million in the previous year [4] Capital Adequacy - OP MB's Common Equity Tier 1 (CET1) ratio decreased to 372.0% from 797.0% due to an increase in total risk exposure amount following regulatory changes [8][11] - The total risk exposure amount increased significantly to EUR 98,034 thousand from EUR 45,755 thousand [10][11] Collateralisation of Bonds - The cover pool for the Euro Medium Term Covered Bond (Premium) programme included EUR 6,882 million in loans as collateral, with overcollateralisation exceeding the minimum requirement [6] - The Euro Medium Term Covered Note programme had a cover pool of EUR 9,468 million, also exceeding the minimum requirement [7] Risk Profile - OP MB has a strong capital base and risk-bearing capacity, with key credit risk indicators showing stable credit risk exposure [28] - The liquidity coverage ratio (LCR) for OP Financial Group was reported at 202%, indicating strong liquidity management [29] Outlook - The global economic outlook is weakening, with the Finnish economy expected to grow less than previously anticipated, leading to increased uncertainty [32] - OP MB's capital adequacy is expected to remain strong, allowing for future issuance of covered bonds [33]

Financial Performance Highlights - 1Q25 Group Net Profit reached 1,697.3 billion won, a 62.9% YoY increase, boosting Group ROE to 13.04%, up by 4.91%p [11, 12] - Non-Bank subsidiaries contributed 42% to the Group's net profit, demonstrating a well-balanced portfolio and earnings stability [14, 17] - Group Net Interest Income increased by 2.9% YoY to 3,262.2 billion won, driven by funding cost control efforts [23] - Group Net Non-Interest Income significantly increased by 208% QoQ to 1,292.0 billion won, primarily due to improved securities-related income [28] - Group G&A Expenses decreased by 1.4% YoY to 1,605.6 billion won, resulting in a record-low CIR of 35.3% [34, 38] - Group Provision for Credit Losses increased by 16.0% QoQ to 655.6 billion won, due to Bank's one-off provisioning [40, 42] Capital Adequacy - Group BIS Ratio stood at 16.57% and CET1 Ratio at 13.67% in 2025.3, reflecting industry-strongest capital strength [47, 52] - Bank Loans in Won increased by 6.8% YoY, and 0.9% YTD [71] Subsidiary Performance - KB Kookmin Bank reported a profit for the period of 1,026.4 billion won, with an ROE of 11.06% and a NIM of 1.76% [77] - KB Securities recorded a profit for the period of 179.9 billion won, with an ROE of 10.82% [80]