Sampo Group's Interim Report January - March 2005
Strong operational results in all business areas
Sampo Group's profitability in the first quarter of 2005 was good.
Profit before taxes rose to EUR 230 million (190) and RoEC was 21.5
per cent. Earnings per share, as reported in the income statement,
amounted to EUR 0.30 (0.28). Taking into account the change in the
fair value reserve, earnings were EUR 0.37 per share (0.36). Net
asset value per share was EUR 0.30 higher than at the end of 2004 and
increased to EUR 6.46 (6.16).
- - Group operating profit increased to EUR 227 million (201). Profit
for the financial period was EUR 172 million (157), leading to
earnings per share of EUR 0.30 (0.28). Taking the change in the fair
value reserve into account increases earnings by an additional EUR
0.07 per share. RoEC exceeded the 19 per cent target and was 21.5 per
cent.
- - Banking and investment services made a profit of EUR 62 million
before taxes (56). Lending especially in housing loans and in the
Baltic banks grew strongly and net interest income rose to EUR 82
million (80). Net fees and commissions developed favourably and were
EUR 51 million (48), mainly driven by the growth of asset management
fees. Credit quality remained good. RoEC in banking and investment
services was 18.3 per cent.
- - The combined ratio in P&C insurance operations improved
significantly and was 94.9 per cent (100.8). Net investment income
amounted to EUR 74 million and profit before taxes rose to EUR 117
million. RoEC in P&C insurance was 21.4 per cent.
- - Life insurance operations had a good quarter as investment income
rose to EUR 124 million (92) and operating profit was EUR 60 million
(23). RoEC in life insurance was 33.3 per cent.
- - The results of Sampo plc, the Group's parent company, and
Primasoft, IT-services provider, are reported under the Other
segment. Primasoft's effect on the profit is negligible. The reported
loss of EUR 12 million (122) is due to the operating costs of the
parent company and the interest paid on financing the acquisition of
the P&C subsidiary, If. The comparison figure contains EUR 95 million
in sales gains from Skandia shares.
2005 2004 2004
EUR m 1-3 1-3 Change 1-12
Operating profit 227 201 25 942
Banking *) 62 56 5 274
P&C insurance *) 117 - - 427
Life insurance 60 23 36 136
Other *) -12 122 -94 106
Group profit for the financial period 172 157 15 848
Earnings per share, EUR 0.30 0.28 1,46
EPS, incl. change in fair value reserve 0.37 0.36 1.58
Net asset value per share, EUR 6.46 6.35 6.16
RoEC, % 21.5 - 26.4
The figures in this interim report are unaudited.
2 (42)
Sampo Group is preparing its first consolidated financial statements
in accordance with the International Financial Reporting Standards
(IFRS) for the period, 1 January to 31 December 2005. The information
in this interim report is presented according to the Finnish
requirements. The interim report for the first quarter of 2005 has
been prepared in accordance with the IFRS and the interpretations of
the International Financial Reporting Interpretations Committee
(IFRIC) issued and effective at the time of preparing these
statements. The consolidated financial statements for 2005 will be
prepared in accordance with the IFRS standards effective at 31
December 2005. Sampo's consolidated financial statements were
prepared in accordance with Finnish Accounting Standards (FAS) until
31 December 2004. FAS differs in some areas from IFRS. The
comparative figures for 2004 have been restated to comply with the
IFRS.
Sampo Group
Sampo Group's profitability in the first quarter of 2005 was good.
Profit before taxes rose to EUR 230 million (190). Earnings per share
amounted to EUR 0.30 (0.28) or, taking into account the change in the
fair value reserve, EUR 0.37 (0.36). RoEC was 21.5 per cent, thus
exceeding the 19.0 per cent target.
2005 will be the first full financial year when Sampo's P&C insurance
subsidiary, if, will be fully consolidated. In the first quarter of
2004, If was still treated as an associated company. Although the
growth in Group profit reflects the consolidation of If, profits in
banking and investment services and in life insurance also grew.
During the first quarter of 2005 the Group's equity grew by EUR 191
million to EUR 3,631 million. This was due not only to the profit for
the period, but also to the EUR 38 million increase in the fair value
reserve. Sampo Group's capital adequacy is as of 1 January 2005
measured by the national rules on conglomerate capital adequacy based
on the European Union's Directive 2002/87/EU. At the end of March
2005 Sampo Group's own funds exceeded the minimum solvency
requirements by EUR 1,736 million and solvency ratio was 182.3 per
cent.
OPERATING PROFIT 2005 2004 Results 2004
EUR m 1-3 1-3 impact 1-12
Banking and investment services 62 56 5 274
P&C insurance 117 - 117 427
Life insurance 60 23 36 136
Other -12 122 -110 106
Group total 227 201 25 942
Profit (loss) for the financial period 172 157 15 848
Key figures 2005 2004 2004
1-3 1-3 1-12
Return on equity (at fair value) % 23.3 18.2 26.5
RoEC (Return on Economic Capital) % 21.5 - 26.4
Solvency ratio % 182.3 - 170.6
Average number of staff (FTE) 11 736 5 075 11 898
Earnings per share EUR 0.30 0.28 1.46
EPS, incl. change in fair value reserve EUR 0.37 0.36 1.58
Diluted earnings per share EUR 0.29 0.28 1.44
NAV per share EUR 6.46 6.35 6.16
Adjusted share price, high EUR 11.20 9.76 10.24
Adjusted share price, low EUR 9.83 8.20 7.20
Market capitalisation EUR m 6 337 5 265 5 728
3 (42)
Changes in Group structure
In early February If P&C Insurance Ltd (publ.) sold its 42.1 per cent
stake in Gard Marine & Energy Ltd to Gard P&I Ltd. It had been
intended that the financial investment would be successively reduced
over time, but Gard P&I exercised its right to acquire the shares
ahead of plan.
Sampo Life Insurance Company Limited was granted in April permission
to pursue the life insurance business in Sweden. Finansinspektionen,
the supervisory authority for the banking and insurance industry in
Sweden, granted a license for a new company, If Livf�rs�kring AB. The
company is fully owned by Sampo Life.
Administration
The Annual General Meeting held on 11 April 2005 re-elected the
earlier 8 members - Tom Berglund, Anne Brunila, Georg Ehrnrooth,
Jyrki Juusela, Olli-Pekka Kallasvuo, Christoffer Taxell, Matti Vuoria
and Bj�rn Wahlroos - to the Board. At its inaugural meeting the Board
re-elected Olli-Pekka Kallasvuo as Chairman and Jyrki Juusela as Vice
Chairman.
In addition, the Annual General Meeting decided to approve the
following amendments, as proposed by the Board, to the Articles of
Association:
- - In accordance with Article 2 of the Articles of Association, Sampo
plc's domicile was changed from Turku to Helsinki, where Sampo plc's
head office and administrative domicile are already located.
- - Paragraph 3 of Article 8 of the Articles of Association and the
reference contained therein to the age of Board members at the
beginning of their term of office was deleted.
- - The reference in Paragraph 2 of Article 17 of the Articles of
Association to the publication of a Notice of General Meeting in a
newspaper published in Turku was deleted due to the above-mentioned
amendment to Article 2 of the Articles of Association.
The firm of authorised public accountants, Ernst & Young Oy, was
re-elected Auditor.
The Annual General Meeting of Sampo Life Insurance Company Limited
held on 17 March 2005 decided to simplify the company's
administrative structure and to terminate the company's Supervisory
Board. The Articles of Association were amended accordingly.
On 25 January 2005 Sampo plc's Board of Directors nominated three new
members to the Group's Executive Committee. They are Gunnar Rogstad,
responsible for the business area If Private, Ivar Martinsen,
responsible for the business area If Commercial and Ricard
Wennerklint, CFO of If. At the same time the Board also appointed a
Group MD Committee, consisting of Bj�rn Wahlroos, Group CEO
(Chairman), Kari Stadigh, Group Deputy CEO, Torbj�rn Magnusson,
President of If, Mika Ihamuotila, President of Banking and Patrick
Lapvetel�inen, CIO. Ilona Ervasti-Vaintola, Chief Counsel, will act
as Secretary.
Changes in share capital
The Annual General Meeting of 11 April 2005 authorised the Board of
Directors to decide on the repurchase of Sampo's own shares. The
authorisation is valid until 11 April 2006. The maximum amount of A
shares that can be repurchased is 5 per cent of the company's share
capital or of the number of votes attached to all shares. Shares can
be bought back either through an offer made to all holders of A
shares in proportion to their holdings and on equal terms determined
by the Board, or through public trading on the Helsinki Stock
Exchange, in which case the shares will not be bought in proportion
to the holdings of the shareholders. Shares can be repurchased to be
cancelled. Sampo plc did not buy back any of its own shares in the
first quarter of 2005.
The Annual General Meeting of 11 April 2005 also decided, in
accordance with the proposal of the Board of Directors, to pay a
dividend of EUR 0.20 per share for 2004.
4 (42)
On 18 February 2005 Sampo received a disclosure under chapter 2,
section 9 of the Securities Markets Act, according to which the
Finnish government's holding in Sampo A shares and connected voting
rights had decreased below 15 per cent. The Finnish government also
informed Sampo that it had agreed to a lock-up of its remaining Sampo
shares for 90 days.
On 4 January 2005 the Board approved subscription of 2,018,850 A
shares with the warrants of Sampo plc's 1998 option programme. An
increase of EUR 8,613,585.49 was received in capital and reserves,
including EUR 339,546.20 in share capital which was entered in the
Finnish Trade Register on 12 January 2005. Sampo plc's share capital
after the increase amounts to EUR 95,157,577.78 and the number of A
shares totals 564,581,265 shares. After the increase, the total
number of shares of the company, including 1,200,000 B shares, is
565,781,265 shares.
Staff
P&C insurance employees are included in the Group's staff from the
second quarter of 2004. Under IFRS the Group's staff figures are
slightly different from those reported earlier because
full-time-equivalent metrics have been adopted. The staff increased
by 6,671 employees to 11,748 employees as of the end of March 2005.
35 per cent of the staff worked in banking and investment services,
56 per cent in P&C insurance, 3 per cent in life insurance, 1 per
cent in the holding company and 4 per cent in Primasoft. The staff
decreased in Finnish banking due to reorganisation of the branch
network and increased in the rapidly growing Baltic subsidiaries. The
staff decreased marginally in life insurance operations, Primasoft
and in P&C operations. The average number of employees during the
first quarter of 2005 was 11,736, compared with 5,075 during the
first quarter of 2004.
Ratings
During the first quarter of 2005, the major credit ratings given to
Sampo Group companies did not change. On 11 May 2005 the ratings were
as follows:
Rated company Moody's Standard and Poor's
Sampo plc Baa1 not rated
Sampo Bank plc A1/P-1 A-/A-2 stable outlook
AS Sampo Pank (Estonia) A2*/P1 not rated
If P&C Insurance Co. Ltd (Finland) A2 A-
If P&C Insurance Ltd (Sweden) A2 A-
* Long-term bank deposit rating
Group solvency
As of 1 January 2005 rules on calculating solvency for financial
conglomerates entered into force. Group solvency consists of the
difference between own funds and the minimum requirement set for
them. The rules determine the own funds and minimum own funds
requirements for subsidiaries and associated companies operating in
banking or insurance sector to be calculated according to sectoral
rules. In the group solvency calculation funds that cannot be used to
cover losses in other group companies are not taken into
consideration. Sampo Group applies the consolidation method to
calculate its solvency position. The Group's solvency ratio was 182.3
per cent on 31 March 2005.
Banking and investment services
The Group's main banking and investment service companies are Sampo
Bank plc, which operates in Finland and in all the Baltic countries,
Sampo Fund Management Ltd, Mandatum Asset Management Ltd, Mandatum
Stockbrokers Ltd, Mandatum & Co Ltd, Mandatum Private Equity Funds
Ltd and 3C Asset Management Ltd. Sampo PTE S.A., a pension fund
company in Poland, is also included in the accounts of Sampo's
banking and investment services. The branch network operates as a
distribution channel for a wide range of advisory services and
long-term savings products.
5 (42)
Profit before taxes in the banking and investment services segment
rose to EUR 62 million (56), while RoEC was 18.3 per cent in the
first quarter. Total operating income was EUR 166 million (158) and
expenses were EUR 105 million (102). The quarter was characterised by
strong growth in retail lending and long-term savings. Positive
consumer sentiment, new investment products and a successful housing
loan marketing campaign reinforced the good underlying market
situation.
Results 2005 2004 2004
EUR m 1-3 1-3 1-12
Net interest income 82 80 323
Net income from financial transactions 20 13 74
Net fee and commission income 51 48 194
Other operating income 13 17 90
Total operating expenses -105 -102 -407
Profit (loss) before taxes 62 56 274
Key figures
Cost to income ratio *) % 64.6 67.8 61.1
RoEC % 18.3 - 21.1
Deposits EUR m 9,649 9,467 9,035
Lending EUR m 15 619 15 322 13 993
Mutual fund assets EUR m 7 495 5 900 6 783
Average number of staff (FTE) 4 110 4 036 4 102
*) Fees and commissions net
Net interest income rose to EUR 82 million (80), because strong
growth in lending volumes more than compensated for tightening of
spreads. Comparison figure contains Sampo Credit plc which was merged
to Sampo plc in October 2004. The merger reduces net interest income
by approximately EUR 3 million per quarter. Growth of loans and
advances continued during the period and the total of EUR 15,619
million was 12 per cent higher than one year ago. Housing loans grew
by 20 per cent in total and 17 per cent in Finland exceeding market
growth, thus Sampo Bank's market share of Finnish housing loans rose
to 14.6 per cent (14.3). Driven mainly by consumer credits, other
loans to personal customers also grew fast by a rapid 17 per cent.
Corporate lending grew by 4 per cent, with the largest increases in
overdrafts and finance leases. Geographically, as in 2004, the growth
in lending and deposits was the fastest in the Baltic countries.
Credit quality remained good. Deposit growth also picked up and
deposits increased by 7 per cent to EUR 9,649 million at the end of
March. Impairment on loans and receivables was positive and added EUR
4 million (7) to the profit.
Net fee and commission income grew to EUR 51 million (48) mainly
because of growth in mutual funds and asset management. Mutual fund
assets grew by 27 per cent to EUR 7,495 million, with the biggest
increase being in equity and balanced funds. Assets include EUR 1.3
billion in Group investments. The shift towards equity products
raised gross fees by over 100 basis points, which is approximately 10
basis points higher than in 2004 on average. Sampo's market share in
assets of mutual funds registered in Finland was 20.7 per cent at 31
March 2005.
Sampo Bank Group's capital adequacy declined to 10.1 per cent (11.2)
because the strong growth in lending increased risk-weighted assets
and dividends paid to Sampo plc reduced the capital base. The tier 1
ratio was 6.8 per cent (7.3). Tier 1 capital grew to EUR 992 million
(906) although Sampo Bank paid a dividend of EUR 141 million to Sampo
plc in March 2005.
6 (42)
P&C insurance
If is the leading property and casualty insurance company in the
Nordic region, with insurance operations that also encompass the
Baltic countries. If P&C Insurance Holding Ltd is the parent company
for property and casualty insurance within the Sampo Group. Business
operations are conducted via subsidiaries and branch offices in the
Nordic and Baltic countries.
Results 2005 2004 2004
EUR m 1-3 1-3 4-12
Insurance premiums earned 906 - 2,697
Net income from investments 74 - 198
Claims incurred -634 - -1,780
Other expenses -228 - -688
Profit (loss) before taxes 117 - 427
Key figures
Combined ratio % 94.9 - 89.8
Risk ratio % 70.0 - 64.6
Cost ratio % 24.9 - 25.2
RoEC % 21.4 - 28.3
Average number of staff (FTE) 6,650 - 6,776
Sampo plc's holding in If P&C was 38.05 per cent in the first quarter
of 2004 and the company was treated as an associated company.
Accordingly, comparison figures for the first quarter of 2004 are not
available.
Operating profit deteriorated slightly during the first quarter to
EUR 117 million, due to lower investment income. Insurance operations
were the main contributor to profit for the period, as a result of
lower costs and an improved risk selection. Despite the storms during
the first quarter, combined ratios improved in all three major
business areas - Private, Commercial and Industrial.
Excluding exchange-rate effects premium growth was unchanged, in
spite of growth in the business areas of Private and Baltic
countries, due to careful risk selection and the application of net
pricing.
In the first quarter of 2005 the risk ratio improved to 70.0 per
cent. Careful risk selection contributed favourably to the results.
The claims frequency and the large claims outcome were normal for the
period, despite the storms at the beginning of the quarter. The risk
ratio in the Private and Commercial business areas improved compared
with the year-earlier period, while the storms resulted in a slightly
higher risk ratio in the Industrial and Baltic business areas. The
favourable result for prior-year claims was due primarily to a
revaluation of the claims cost for a few claims, including the
tsunami disaster at the end of 2004.
Costs amounted to EUR 228 million, with exchange rate effects
accounting for less than EUR 2 million. The cost ratio decreased by
1.6 percentage points, due to factors such as reduced staffing and
lower commission costs. In particular, costs were reduced in the
Finnish operations following a comprehensive cost reduction
programme.
Investment income was EUR 74 million and the yield on investments
amounted to 1.0 percent for the first quarter. The percentage of
equities in the portfolio (including derivative instruments) was
increased somewhat during the quarter and amounted to approximately
13 percent at the end of the period. The return on the equity
portfolio was approximately 2 percent. The duration for
interest-bearing assets (84% of the portfolio) was increased but
continued to be kept consistently below the target length of 3.5
years and amounted to 1.7 years at 31 March 2005.
7 (42)
The solvency ratio was 67.2 percent and solvency capital amounted to
EUR 2,445 million, as a result of the EUR 249 million dividend paid
during March 2005.
Life insurance
The core of the Group's life insurance operations is Sampo Life,
which operates in Finland and in all the Baltic countries. The
business area also comprises Sampo T.U. Zycie in Poland.
Results 2005 2004 2004
EUR m 1-3 1-3 1-12
Insurance premiums earned 131 130 510
Net income from investments 124 92 339
Claims incurred -169 -155 -466
Change in liabilities for inv. and ins. contracts -10 -43 -194
Other expenses -14 -12 -52
Profit (loss) before taxes 62 12 142
Key figures
Expense ratio % 108.3 101.7 100.6
RoEC % 33.3 - 17.7
Average number of staff (FTE) 368 375 372
Sampo Group's life insurance companies made a profit before taxes of
EUR 62 million (12). The investment yield for the first quarter of
2005 was 2.8 per cent at market values (3.5), because of the good
performance of equity investments. Net investment income increased to
EUR 124 million (92). Both years contain EUR 25 million in investment
income on unit-linked contracts. Life insurance operations exceeded
their RoEC target 17.5 per cent, achieving an annualised return of
33.3 per cent.
The market value of investment assets (excl. assets covering
unit-linked liabilities) was EUR 5.6 billion (5.6) at 31 March 2005.
Fixed income instruments constituted 63 per cent (58) of all
investments, equity-linked instruments 32 per cent (36) and real
estate 5 per cent (6). At 31 March 2005 Finnish equities accounted
for 60 per cent of all direct equity investments, while 6 per cent
was invested elsewhere in the euro zone and 34 per cent outside the
euro zone.
The solvency capital of Sampo Life was EUR 932 million (958) and
amounted to 19.4 per cent of technical reserves on own account
(19.9). The company paid a dividend of EUR 100 million in March 2005
to the parent company, Sampo plc.
The premium income of Sampo Group's life insurance companies was at
the same level as a year earlier and amounted to EUR 131 million
(130). The Baltic life insurance companies continued to grow, with
premiums rising to EUR 3.9 million (3.6). The growth of unit-linked
premiums slowed down to 1 per cent, with premiums of EUR 76 million
(75), which was 58 per cent of total premiums (58). Sampo Life's
market share in unit-linked insurance weakened to 22.2 per cent
(27.8). Sampo Life's overall market share in Finland was 16.4 per
cent (16.9).
8 (42)
Other
The operations of Sampo plc (the holding company) and Primasoft are
reported under this heading. Sampo plc's main function is to own and
control the subsidiaries engaged in insurance, banking and investment
services. Primasoft provides IT services to various companies in
Sampo Group.
Results 2005 2004 2004
EUR m 1-3 1-3 1-12
Total operating income 14 166 233
Total operating expenses -25 -44 -127
Profit (loss) before taxes -12 122 106
The segment's result before taxes was a loss of EUR 12 million (122).
The comparison figure contains EUR 95 million in sales gains from the
sale of shares in Skandia held by Sampo plc, and Sampo plc's share of
If's profits, EUR 40 milllion, as If was still treated as an
associated company in the first quarter of 2004.
During the first quarter of 2005, Sampo plc received dividends from
its subsidiaries totalling EUR 509 million. Banking and investment
services companies paid a dividend of EUR 160 million, If P&C
Insurance Holding Ltd paid EUR 249 million and Sampo Life paid EUR
100 million.
Sampo plc's balance sheet total was EUR 4.1 billion. Of this amount,
holdings in banking and investment services companies accounted for
EUR 0.9 billion and holdings in insurance companies for EUR 2.4
billion. Liabilities include the following debt instruments in
addition to short term operational financing - a EUR 600 million
subordinated note, senior notes to the amount of EUR 300 million and
a bank loan of EUR 200 million. The bank loan will be paid back in
June 2005 earlier than originally planned. At current market rates
Sampo plc is liable for interest payments on the above instruments of
approximately EUR 10 million per quarter.
Primasoft has a minor impact on the profit or loss of the Other
segment.
At the end of March 2005, Sampo plc had 83 employees (81) and
Primasoft had 524 employees (582).
Outlook for the rest of 2005
Uncertainties in the world economy are highlighted in capital
markets, which have turned more volatile in the weeks following the
end of March. However, these developments are not expected to
significantly affect Sampo Group's results for 2005 barring a
considerable downturn.
Sampo Group is targeting a RoEC of at least 19 per cent and its
profitability is expected to remain good in 2005. However,
significant one-off items similar to those in 2004 are not
anticipated.
Sampo Group's banking and investment services are aiming to grow in
selected product areas, including long-term savings, consumer credits
and housing loan products. It is expected that profitability will
remain good and that credit quality will continue to be excellent.
The importance of the Baltic markets is emphasized by high growth and
improving profitability. Banking and investment services are
targeting a RoEC of 20 per cent.
9 (42)
The P&C insurance subsidiary, If, is expected to reach its combined
ratio target of below 95 per cent for the full year 2005. The company
is targeting a RoEC of 17.5 per cent. If is in the process of
introducing new health insurance and care products in the Nordic
markets.
The profitability of Sampo Group's life operations is highly
dependent on capital markets. Life insurance is expected to achieve
its RoEC target of 17.5 per cent unless conditions in investment
markets turn significantly worse. The growth of the Baltic
subsidiaries is expected to continue. Strong market positions in
focus areas, particularly in unit-linked insurance, continue to be a
key priority.
The parent company, Sampo plc, will report a loss of approximately
EUR 14 million per quarter, mainly due to interest payments on the
financing associated with the If acquisition in 2004.
SAMPO PLC
Board of Directors
For more information, please contact:
Peter Johansson, CFO, tel. +358 10 516 0010
Jarmo Salonen, Head of Investor Relations, tel. +358 10 516 0030
Hannu Vuola, Head of Group Communications, tel. +358 10 516 0040
An English-language telephone conference for investors and analysts
will be held at 4.30 p.m. Please call +44 (0) 20 7162 0181
(UK/European) or +1 334 323 6203 (North American). Password: SAMPO.
The conference can also be followed from a direct transmission on the
Internet at www.sampo.com/ir
A recorded version will later be available at the same address.
Sampo will publish the second quarter 2005 interim report on 10
August 2005.
DISTRIBUTION:
Helsinki Stock Exchange
The principal media
Financial Supervision
www.sampo.com
10 (42)
GROUP FINANCIAL REVIEW
FINANCIAL HIGHLIGTS 1-3/ 1-3/ 1-12/
2005 2004 2004
GENERAL KEY FIGURES
Revenue EURm 1,583 522 5,194
Operating profit EURm 227 201 942
% of revenue % 14.3 38.6 18.1
Return on equity (at current value) % 23.3 18.2 26.5
Return on assets (at current value) % 3.4 2.6 4.0
Equity/assets ratio % 9.1 13.5 9.1
RoEC % 21.5 - 26.4
Group solvency*) % 1,736 - 1,504
Group solvency ratio 182.3 - 170.6
Average number of staff 11,736 5,075 11,898
BANKING AND INVESTMENT SERVICES
Revenue EURm 251 227 989
Net interest margin EURm 96 94 382
Operating profit EURm 62 56 274
% of revenue % 24.5 24.7 27.7
Income to cost ratio 1.48 1.42 1.55
Cost to income ratio 67.7 70.5 64.4
RoEC % 18.3 - 21.1
Average number of staff 4,110 4,036 4,102
PROPERTY & CASUALTY INSURANCE*
Revenue EURm 1,049 3,090
Premiums written before reinsurers' share EURm 1,419 2,427
Premiums earned EURm 906 2,697
Operating profit EURm 117 427
% of revenue % 11.2 13.8
RoEC % 21.4 28.3
Risk ratio % 70.0 64.6
Cost ratio % 24.9 25.2
Loss ratio % 76.6 71.1
Loss ratio before unwinding of discount 78.1 72.6
Expense ratio % 18.3 18.7
Combined ratio % 94.9 89.8
Combined ratio before unwinding of 96.4 91.2
discount
Average number of staff 6,650 6,776
* Comparetive figures of P&C insurance for
April to December 2004, excl. RoEC which
is Pro Forma figure for 12 months
11 (42)
LIFE INSURANCE
Revenue EURm 256 224 866
Premiums written before reinsurers' share EURm 132 132 528
Operating profit* EURm 60 23 136
% of revenue % 23.3 10.4 15.7
RoEC % 33.3 - 17.7
Expense ratio % 108.3 101.7 100.6
Average number of staff 368 375 372
* Before bonuses and rebates
OTHER**)
Operating profit EURm -12 122 106
Average number of staff 608 664 648
PER SHARE KEY FIGURES
Earnings per share EUR 0.30 0.28 1.46
Diluted earnings per share ***) 0.29 0.28 1.44
Capital and reserves per share EUR 6.42 6.30 6.11
Net asset value per share EUR 6.46 6.35 6.16
Adjusted share price, high EUR 11.20 9.76 10.24
Adjusted share price, low EUR 9.83 8.20 7.20
Market capitalisation EURm 6,337 5,265 5,728
*) Group solvency is calculated according to the consolidation method
defined in Chapter 3 of the Act on the Supervision of Financial and
Insurance Conglomerates, which entered into force on 1 January 2005.
Solvency ratio is defined as the ratio of own funds to the sum of
minimum requirements calculated under sectoral
rules.
**) The net investment income of other business includes the income
from If Group, accounted for by the equity method, for the first
quarter of 2004
***) The dilution effect has been calculated as if all the remaining
subscription rights (774 860/the bond loan with warrants of 1998 and
5,199,000/the option programme of 2000 at the end of March, 2005)
would have been realised. One subscription right entitles to
subscribe 5 shares.
In calculating the key figures the tax corresponding to the result
for the accounting period has been taken into account. The valuation
differences of investment property and held-to-maturity debt
securities have been taken into account in return on equity,
equity/assets ratio and net asset value per share. A deferred tax
liabilities has been deducted from valuation
differences.
The key figures for Banking and Investment Services and the holding
company have been calculated according to regulation 20/420/98 of the
Financial Supervision. The key figures for the insurance business
have been calculated according to the decree of the Ministry of
Finance and the specifying instruction 23/09/2002 of the Ministry of
Social Affairs and Health.
12 (42)
GROUP QUARTERLY INCOME STATEMENT
EURm 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
2005 2004 2004 2004 2004
Net interest income 73 74 67 75 81
Net income from financial 21 22 28 14 10
transactions
Net fee and comission income 46 44 45 42 45
Impairment losses on loans and 4 -3 4 3 7
receivables
Insurance premiums earned 1,036 1,074 1,011 992 130
Net income from investments 202 207 142 133 234
Other operating income 6 19 8 34 18
Total operating income 1,387 1,437 1,306 1,292 526
Claims incurred -804 -674 -695 -722 -155
Change in other insurance -10 -135 -15 -1 -43
liabilities
Staff costs -175 -197 -173 -170 -65
Other operating expenses -169 -151 -169 -175 -73
Total operating expenses -1,158 -1,157 -1,052 -1,069 -336
Profit (loss) before taxes 230 280 254 223 190
Taxes -58 -29 -88 51 -34
Profit (loss) for the financial year 172 251 166 274 157
Attributable to
Equity holders of parent company 169 250 150 263 155
Minority interest 3 1 17 12 2
CONSOLIDATED INCOME STATEMENT
EURm 1-3/ 1-3/ Change 1-12/
2005 2004 2004
Net interest income 73 81 -8 297
Net income from financial transactions 21 10 11 74
Net fee and comission income 46 45 1 176
Impairment losses on loans and 4 7 -3 11
receivables
Insurance premiums earned 1,036 130 906 3,207
Net income from investments 202 234 -33 717
Other operating income 6 18 -13 80
Total operating income 1,387 526 861 4,562
Claims incurred -804 -155 -649 -2,246
Change in other insurance liabilities -10 -43 33 -194
Staff costs -175 -65 -110 -684
Other operating expenses -169 -73 -97 -490
Total operating expenses -1,158 -336 -822 -3,613
Profit (loss) before taxes 230 190 39 948
13 (42)
Taxes -58 -34 -24 100
Profit (loss) for the financial year 172 157 15 848
Attributable to
Equity holders of parent company 169 155 817
Minority interest 3 2 31
Earning per share (eur)
Basic 0.30 0.28 1.46
Diluted 0.29 0.28 1.44
CONSOLIDATED BALANCE SHEET
EURm 1-3/ 12/ 1-3/
2005 2004 2004
Assets
Cash and cash equivalents 1,443 1,163 350
Trading assets and derivative 1,214 2,227 1,997
financial instruments
Other assets at fair value through p/l 1,442 546 554
Loans and receivables 16,532 15,781 14,916
Investments 14,503 13,960 6,529
Investments covering unit-linked 979 882 687
contracts
Reinsurers' share of insurance 800 696 11
liabilities
Intangible assets 938 944 323
Property, plant and equipment 244 243 189
Other assets 2,078 1,472 595
Tax assets 175 224 48
Total assets 40,347 38,138 26,198
Liabilities
Trading liabilities and derivative 621 589 539
financial instruments
Amounts owed to credit institutions 11,663 11,037 10,245
and customers
Debt securities in issue 7,824 7,928 5,240
Liabilities for insurance and 12,812 12,226 4,656
investment contracts
Liabilities for unit-linked insurance 976 884 687
and investment contracts
Other liabilities 2,405 1,610 953
Tax liabilities 395 393 360
Total liabilities 36,695 34,667 22,679
Equity
Share capital 95 95 93
Reserves 1,660 1,622 1,556
Retained earnings 1,876 1,723 1,844
14 (42)
Equity attributable to parent 3,631 3,440 3,493
company's equityholders
Minority interest 21 26 25
Total equity 3,652 3,471 3,519
Total equity and liabilities 40,347 38,138 26,198
CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR THREE MONTHS ENDED 31
MARCH 2005
EURm Note Banking and P&C Life Other Elimina-tions Group
invest-ment insu-rance insu-rance
Net interest 1 82 -11 2 73
income
Net income 2 20 1 21
from
financial
transactions
Net fee and 3 51 0 -5 46
comission
income
Impairment 4 4 4
losses on
loans and
receivables
Insurance 5 906 131 1,036
premiums
earned
Net income 6 2 74 124 4 -3 202
from
investments
Other 7 0 21 -22 6
operating
income
Total 166 979 256 14 -28 1,387
operating
income
of which 4 11 5 -20
between the
segments
Claims -634 -169 -804
incurred
Change in -10 -10
other
insurance
liabilities
Staff costs 7 -52 -106 -6 -12 2 -175
Other 8 -53 -121 -8 -13 26 -169
operating
expenses
Total -105 -862 -193 -25 28 -1,158
operating
expenses
Profit (loss) 62 117 62 -12 0 230
before taxes
Taxes -58
Profit (loss) 172
for the
financial
year
Attributable
to
Equity 169
holders of
parent
company
Minority 3
interest
15
(42)
CONSOLIDATED
BALANCE SHEET
BY SEGMENT AT
31 MARCH 2005
EURm Note Banking and P&C Life Other Elimi-nations Group
invest-ment insu-rance insu-rance
Assets
Cash and cash 1,028 402 146 -133 1,443
equivalents
Trading 9.10 1,166 58 8 5 -23 1,214
assets and
derivative
financial
instruments
Other assets 11 1,467 -25 1,442
at fair value
through p/l
Loans and 12 16,503 466 -436 16,532
receivables
Investments 13 68 9,113 5,388 3,535 -3,602 14,503
Investments 14 979 0 979
covering
unit-linked
contracts
Reinsurers' 784 16 0 800
share of
insurance
liabilities
Intangible 15 139 621 156 23 938
assets
Property, 168 32 20 24 0 244
plant and
equipment
Other assets 16 503 1,419 116 87 -47 2,078
Tax assets 20 141 1 13 0 175
Total assets 21,060 12,571 6,828 4,153 -4,265 40,347
Liabilities
Trading 9.10 547 56 18 0 621
liabilities
and
derivative
financial
instruments
Amounts owed 17 11,916 313 -566 11,663
to credit
institutions
and customers
Debt 18 6,625 295 100 1,145 -342 7,824
securities in
issue
Liabilities 19 8,232 4,580 12,812
for insurance
and
investment
contracts
Liabilities 20 976 976
for
unit-linked
insurance and
investment
contracts
Other 21 953 1,223 169 107 -47 2,405
liabilities
Tax 53 199 134 9 395
liabilities
Total 20,094 10,006 5,976 1,573 -954 36,695
liabilities
Equity
Share capital 95
Reserves 1,660
Retained 1,876
earnings
Equity 3,631
attributable
to parent
company's
equityholders
Minority 21
interest
Total equity 3,652
Total equity 40,347
and
liabilities
16 (42)
CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR YEAR ENDED 31 DECEMBER
2004
EURm Note Banking and P&C Life Other Elimi-nations Group
invest-ment insu-rance insu-rance
Net interest 1 323 -38 12 297
income
Net income 2 74 6 -6 74
from
financial
transactions
Net fee and 3 194 -1 -17 176
comission
income
Impairment 4 11 0 11
losses on
loans and
receivables
Insurance 5 2,697 510 3,207
premiums
earned
Net income 6 29 198 339 150 717
from
investments
Other 50 0 4 116 -90 80
operating
income
Total 681 2,895 854 233 -101 4,562
operating
income
of which 29 30 21 -79
between the
segments
Claims -1,780 -466 -2,246
incurred
Change in -194 -194
other
insurance
liabilities
Staff costs 7 -198 -353 -20 -48 13 -606
Other 8 -209 -335 -32 -79 88 -568
operating
expenses
Total -407 -2,468 -712 -127 101 -3,613
operating
expenses
Profit (loss) 274 427 142 106 0 948
before taxes
Taxes -100
Profit (loss) 848
for the
financial
year
Attributable
to
Equity 817
holders of
parent
company
Minority 31
interest
CONSOLIDATED
BALANCE SHEET
BY SEGMENT AT
YEAR ENDED 31
DECEMBER 2004
EURm Note Banking and P&C Life Other Elimi-nations Group
invest-ment insu-rance insu-rance
Assets
Cash and cash 921 269 179 -206 1,163
equivalents
Trading 9.10 1,993 176 38 11 -5 2,212
assets and
derivative
financial
instruments
Other assets 11 546 546
at fair value
through p/l
Loans and 12 15,747 95 -61 15,781
receivables
17 (42)
Investments 13 78 8,687 5,283 3,533 -3,607 13,974
Investments 14 882 882
covering
unit-linked
contracts
Reinsurers' 679 16 696
share of
insurance
liabilities
Intangible 15 141 623 156 24 944
assets
Property, 165 33 20 26 243
plant and
equipment
Other assets 16 280 1,072 84 83 -46 1,472
Tax assets 19 191 3 10 224
Total assets 19,889 11,730 6,661 3,782 -3,925 38,138
Liabilities
Trading 9.10 451 129 9 0 589
liabilities
and
derivative
financial
instruments
Amounts owed 17 10,985 313 -260 11,037
to credit
institutions
and customers
Debt 18 6,625 271 100 1,222 -290 7,928
securities in
issue
Liabilities 19 7,600 4,626 12,226
for insurance
and
investment
contracts
Liabilities 20 884 884
for
unit-linked
insurance and
investment
contracts
Other 21 710 762 53 140 -55 1,610
liabilities
Tax 47 225 117 10 399
liabilities
Total 18,817 8,987 5,789 1,685 -606 34,673
liabilities
Equity
Share capital 95
Reserves 1,622
Retained 1,723
earnings
Equity 3,440
attributable
to parent
company's
equityholders
Minority 26
interest
Total equity 3,465
Total equity 38,138
and
liabilities
18 (42)
CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR THREE MONTHS ENDED 31
MARCH 2004
EURm Note Banking and Life Other Elimi-nations Group
invest-ment insu-rance
Net interest 1 80 -3 4 81
income
Net income 2 13 -1 -2 10
from
financial
transactions
Net fee and 3 48 0 -3 45
comission
income
Impairment 4 7 0 7
losses on
loans and
receivables
Insurance 5 130 130
premiums
earned
Net income 6 4 92 141 -3 234
from
investments
Other 5 0 29 -16 18
operating
income
Total 158 223 166 -20 526
operating
income
of which 13 5 -18
between the
segments
Claims -155 -155
incurred
Change in -43 -43
other
insurance
liabilities
Staff costs 7 -49 -5 -14 3 -65
Other 8 -54 -7 -29 18 -73
operating
expenses
Total -102 -210 -44 20 -336
operating
expenses
Profit (loss) 56 12 122 0 190
before taxes
Taxes -34
Profit (loss) 157
for the
financial
year
Attributable
to
Equity 155
holders of
parent
company
Minority 2
interest
CONSOLIDATED
BALANCE SHEET
BY SEGMENT AT
31 MARCH 2004
EURm Note Banking and Life Other Elimi-nations Group
invest-ment insu-rance
Assets
Cash and cash 346 103 -99 350
equivalents
Trading 9.10 2,006 18 2 -27 1,997
assets and
derivative
financial
instruments
Other assets 11 554 554
at fair value
through p/l
Loans and 12 14,909 418 -412 14,916
receivables
Investments 13 268 5,503 3,326 -2,568 6,529
Investments 14 687 687
covering
unit-linked
contracts
Reinsurers' 11 11
share of
insurance
liabilities
19 (42)
Intangible 15 144 157 22 323
assets
Property, 135 21 34 189
plant and
equipment
Other assets 16 497 94 18 -14 595
Tax assets 31 5 12 48
Total assets 18,890 6,598 3,830 -3,120 26,198
Liabilities
Trading 9.10 514 24 0 539
liabilities
and
derivative
financial
instruments
Amounts owed 17 10,638 113 -506 10,245
to credit
institutions
and customers
Debt 18 5,178 100 511 -549 5,240
securities in
issue
Liabilities 19 4,656 4,656
for insurance
and
investment
contracts
Liabilities 20 687 687
for
unit-linked
insurance and
investment
contracts
Other 21 813 75 82 -16 953
liabilities
Tax 53 172 135 360
liabilities
Total 17,196 5,714 841 -1,071 22,679
liabilities
Equity
Share capital 93
Reserves 1,556
Retained 1,844
earnings
Equity 3,493
attributable
to parent
company's
equityholders
Minority 25
interest
Total equity 3,518
Total equity 26,198
and
liabilities
MOVEMENTS IN CAPITAL AND RESERVES
EURm Share Share Legal Preferred Fair Retained Total
capi-tal pre-mium re-serve capi-tal value ear-nings
ac-count notes reser-ve
Equity at 31 93 971 370 10 1,572 3,016
Dec. 2003, FAS
Transfer of -10 -10
preferred
capital notes
to liabilities
Recognition of 4 4
equalisation
provision into
p/l account
Valuation 191 123 314
of afs shares
Valuation 28 19 47
of debt
securities
20 (42)
Valuation of 20 20
financial
derivatives
hedging cash
flow
Valuation 53 53
of other
financial
derivatives
Net result 0 0
of hedge
accounting
Other 5 5
changes, total
Deferred -69 -56 -125
taxes
Equity at 1 93 971 370 0 170 1,720 3,324
Jan. 2004,
IFRS
Subscription 2 48 49
of share
options
Cash flow
hedges:
- recognised 3 3
in equity
during the
financial year
- recognised -10 -10
in p/l account
Available for
sale financial
assets
- change in 209 209
fair value
- recognised -138 -138
in p/l account
Exchange rate 22 22
translation
difference
Divident -830 -830
distribution
Profit for the 811 811
financial year
Equity at 31 95 1,019 370 0 233 1,723 3,440
Dec. 2004
Subscription 0 0 0
of share
options
Cash flow
hedges:
- recognised 2 2
in equity
during the
financial year
- recognised -4 -4
in p/l account
Available for 0
sale financial
assets
- change in 90 90
fair value
- recognised -50 -50
in p/l account
Exchange rate -16 -16
translation
difference
Profit for the 169 169
financial year
Equity at 31 95 1,019 370 0 271 1,876 3,631
March 2005
21
(42)
RECONCILIATION
OF EQUITY AT
31 MARCH 2004
EURm Share Share Legal Preferred Fair Retained Total
capi-tal premi-um reser-ve capi-tal value ear-nings
account notes reser-ve
Equity at 31 93 971 370 125 1,719 3,279
March 2004,
FAS
Transfer of -125 -125
preferred
capital notes
to liabilities
Recognition of 4 4
equalisation
provision into
p/l account
Valuation 221 123 344
of afs shares
Valuation 59 19 78
of debt
securities
Valuation of 22 22
financial
derivatives
hedging cash
flow
Valuation 53 53
of other
financial
derivatives
Net result 0 0
of hedge
accounting
Other 5 5
changes, total
Deferred -88 -56 -143
taxes
Adjustment -23 -23
to the profit
for the period
Equity at 31 93 971 370 0 215 1,844 3,493
March 2004,
IFRS
RECONCILIATION
OF PROFIT
For the three 178
months ended
31 March 2004,
FAS
Valuation 16
of shares
Valuation -11
of debt
securities
Valuation -47
of financial
derivates
Corporation -11
tax relief
Reversal of 3
amortisation
of goodwill
Income tax 28
for the period
Net result 0
of hedge
accounting
-23
For the three 155
months ended
31 March 2004,
IFRS
22 (42)
PARENT COMPANY INCOME STATEMENT
EURm 1-3/ 1-3/ Change 1-12/
2005 2004 2004
Net interest income -11 -3 -8 -38
Net income from financial transactions 1 -1 2 10
Net fee and comission income 0 0 0 -1
Impairment losses on loans and receivables 0 0 0
Net income from investments 500 115 384 399
Other operating income 2 2 0 11
Total operating income 491 113 378 380
Staff costs -5 -6 1 -14
Other operating expenses -5 -14 9 -39
Total operating expenses -10 -20 11 -53
Profit (loss) before taxes 481 93 388 327
Taxes 4 -23 -23 -15
Profit (loss) for the financial year 485 70 365 312
PARENT COMPANY BALANCE SHEET
EURm 1-3/ 12/ 1-3/
2005 2004 2004
Assets
Trading assets and derivative financial 5 4 1
instruments
Loans and receivables 448 78 402
Investments 3,499 3,501 2,842
Intangible assets 22 24 22
Property, plant and equipment 22 24 32
Other assets 75 67 3
Tax assets 10 6 11
Total assets 4,083 3,704 3,313
Liabilities
Trading liabilities and derivative financial 0 0 0
instruments
Amounts owed to credit institutions and 306 306 106
customers
Debt securities in issue 1,145 1,222 511
Other liabilities 93 120 65
Tax liabilities 9 10 20
Total liabilities 1,553 1,658 703
Equity
Share capital 95 95 93
Reserves 1,647 1,648 2,125
Retained earnings 788 303 392
Total equity 2,530 2,046 2,610
Total equity and liabilities 4,083 3,704 3,313
23 (42)
Banking and investment service
Notes for income Statement
1 INTEREST INCOME AND EXPENSES
1-3/ 1-3/ 1-12/
2005 2004 2004
Interest income
Trading assets and financial derivative 5 5 26
instruments
Other financial assets at fair value through 9 6 26
profit or loss
Loans and receivables 153 145 592
Investments 0 3 8
Other interest income 2 2 12
Total 169 161 664
Interest expenses
Amounts owed to credit institutions and -34 -33 -128
customers
Debt securities in issue -38 -33 -148
Other interest expenses -1 -1 -5
Total -73 -67 -281
Net interest margin 96 94 382
of which included in:
Net income from financial transactions 14 11 52
Net income from investments 0 3 8
Interest income, net in income statement 82 80 323
2 NET INCOME FROM FINANCIAL TRANSACTIONS
1-3/ 1-3/ 1-12/
2005 2004 2004
- From transactions in securities*)
Tradings assets and liabilities and financial
derivative instruments
- - Debt securities and interest rate
derivatives
Interest 5 5 26
Other 1 -12 -7
- - Equities and equity derivatives 4 2 11
- - Other 0 0 0
Total 10 -5 30
Other assets at fair value through profit or
loss
- - Debt securities and interest rate
derivatives
Interest 9 6 26
Other -1 10 6
Total 8 17 32
- From foreign exchange dealing**) 4 2 11
24 (42)
Net income from hedge accounting ***) -1 0 1
Net income from financial transactions in 20 13 74
total
*) Incl. interest income and expenses,
dividends, unrealised gains and losses
arising from valuation and gains and losses
on sale of assets
**) Incl. translation gains and losses and
transaction gains and losses
***) Incl. unrealised gains and losses
arising from valuation of hedging instruments
and hedged assets
3 FEE AND COMMISSION INCOME AND EXPENSES
1-3/ 1-3/ 1-12/
2005 2004 2004
Fee and commission income
Lending 9 8 35
Borrowing 5 5 20
Payment transactions 13 14 57
Securities transactions 4 5 16
Asset management 24 18 80
Guarantees 3 3 12
Corporate Finance operations 1 2 5
Other 8 7 33
Total 67 62 256
Fee and commission expenses -16 -14 -62
Fee and comission income and expenses in 51 48 194
total
4 IMPAIRMENT LOSSES ON LOANS AND RECEIVABLES
1-3/ 1-3/ 1-12/
2005 2004 2004
Impairment losses
New impairment losses recognised in the -3 -3 -13
period
Amount charged in the period for loans and 0 -1 -9
receivables written off
Total -4 -4 -22
Reversals of impairment losses
Reversals of impairment losses 2 2 18
Amount recovered of loans receivables 5 9 15
previously written off
Total 8 11 33
Impairment losses on loans and receivables in 4 7 11
total
25 (42)
6 NET INCOME FROM INVESTMENTS
1-3/ 1-3/ 1-12/
2005 2004 2004
Available-for-sale assets
Debt securities
Interest 0 2 5
Other - 0 0
Equities 1 1 20
Total 2 3 25
Debt securities - held-to-maturity 0 1 3
Investment properties 0 0 1
Net income from investments in total 2 4 29
Net income from investments includes interest
income and expenses, dividends, gains and
losses on sale of assets income from and
expenses on investment properties,
depreciation and impairment losses
7 STAFF COSTS
1-3/ 1-3/ 1-12/
2005 2004 2004
Wages and salaries -39 -36 -148
Pension costs -6 -6 -24
Other social security costs -7 -6 -26
Total -52 -49 -198
Average staff number during the period 4,110 4,036 4,102
8 OTHER OPERATING EXPENSES
1-3/ 1-3/ 1-12/
2005 2004 2004
Administrative expenses -30 -31 -122
Amortisation and depreciation on intangible -10 -10 -43
assets and property, plant and equipment
Other -13 -12 -44
Total -53 -54 -209
Notes for balance sheet
9 TRADING ASSETS AND LIABILITIES AND
DERIVATIVE FINANCIAL INSTRUMENTS
3/2005 12/2004 3/2004
Trading assets
Debt securities 770 1,501 1,558
- - of which treasury bills and other eligible 399 1,246 1,085
bills
Equities 2 0 21
Total 771 1,501 1,579
26 (42)
Derivative financial instruments (Note 10) 395 491 426
Total assets 1,166 1,993 2,006
Trading liabilities
Short selling 160 106 189
Derivative financial instruments (Note 10) 387 345 326
Total liabilities 547 451 514
10 DERIVATIVE FINANCIAL INSTRUMENTS
3/2005 12/2004
Derivatives held for Contract/ Fair Fair value Cont-ract/ Fair Fair value
trading notional value Liabi-lities notio-nal value Liabilities
amount Assets amount Assets
Interest rate
derivatives
OTC derivatives 24,884 108 123 23,030 101 120
Exchange-traded 12,712 2 2 4,038 1 1
derivatives
Foreign exchange
derivatives
OTC derivatives 9,720 93 97 9,762 180 143
Equity derivatives
OTC derivatives 0 - - - - -
Exchange-traded - - - 14 0 0
derivatives
Commodity
derivatives
OTC derivatives 154 4 4 156 6 6
Exchange-traded 5 0 - 3 0 -
derivatives
Total derivative 47,477 207 226 37,003 289 269
assets/(liabilities)
held for trading
Derivatives held for
hedging
Derivatives
designated as fair
value hedges
Interest rate 1,913 151 127 1,985 188 48
derivatives
Equity derivatives 407 32 34 468 8 28
Derivatives
designated as cash
flow hedges
Interest rate 328 5 - 421 8 -
derivatives
Total derivative 2,648 188 161 2,874 203 76
assets/(liabilities)
held for hedging
Total derivative 50,125 395 387 39,877 491 345
assets/(liabilities)
27 (42)
3/2004
Derivatives held for trading Contract/ Fair value Liabilities
notional Assets
amount
Interest rate derivatives
OTC derivatives 13,107 84 106
Exchange-traded derivatives 8,688 3 5
Foreign exchange derivatives
OTC derivatives 9,347 114 109
Equity derivatives
Exchange-traded derivatives 238 5 2
Commodity derivatives
OTC derivatives 108 2 2
Exchange-traded derivatives 2 0 -
Total derivative 31,490 209 224
assets/(liabilities) held for
trading
Derivatives held for hedging
Derivatives designated as fair
value hedges
Interest rate derivatives 1,616 171 77
Equity derivatives - 25 25
Derivatives designated as cash
flow hedges
Interest rate derivatives 683 20 -
Total derivative 2,298 216 102
assets/(liabilities) held for
hedging
Total derivative 33,789 426 326
assets/(liabilities)
11 OTHER FINANCIAL ASSETS AT FAIR
VALUE THROUGH PROFIT OR LOSS
3/2005 12/2004 3/2004
Debt securities 1,467 546 554
- - of which treasury bills and - - -
other eligible bills
12 LOANS AND RECEIVABLES
3/2005 12/2004 3/2004
Loans and advances to credit
institutions
Deposits 419 109 472
Other 465 317 445
Total 884 425 917
28 (42)
Loans and advances to customers
by type of loan
Personal customers 8,416 8,120 7,064
Home loans 6,547 6,225 5,470
Other loans 1,868 1,894 1,594
Corporate customers 7,203 7,202 6,929
Overdrafts 382 259 224
Finance lease receivables 589 552 469
Money market loans 15 223 15
Other commercial loans 6,217 6,167 6,220
Total 15,619 15,322 13,993
Loans and receivables in total 16,503 15,747 14,909
Loans and advances to customers
by customer sector
Domestic 14,252 14,069 12,960
Corporations and housing 5,996 5,919 5,807
companies
Financial and insurance 67 79 68
institutions
Public sector entities 153 304 115
Non-profit institutions 168 158 156
Households 7,867 7,609 6,815
Foreign 1,367 1,253 1,033
Total 15,619 15,322 13,993
13 INVESTMENTS
3/2005 12/2004 3/2004
Securities, available-for-sale
Debt securities 2 2 131
- - of which treasury bill and - - -
other eligible bills
Equities 14 16 5
Total 16 18 136
Securities, held-to-maturity
Debt securities 36 28 84
- - of which treasury bills and 35 27 21
other eligible bills
Shares in associated undertakings 15 28 18
Shares in Group undertakigs 0 2 28
Investment properties
Book value 1 1 1
Fair value 1 1 1
Investments in total 68 78 268
29 (42)
15 INTANGIBLE ASSETS
3/2005 12/2004 3/2004
Goodwill 70 72 69
Other 69 69 75
Total 139 141 144
16 OTHER ASSETS
3/2005 12/2004 3/2004
Prepayments and accrued income 213 174 184
Other assets 289 107 313
Items in transit 14 5 41
Other 275 101 272
Total 503 280 497
17 AMOUNTS OWED TO CREDIT
INSTITUTIONS AND CUSTOMERS
3/2005 12/2004 3/2004
Amounts owed to credit
institutions
Deposits 434 174 206
Other 432 383 133
Total 866 557 339
Amounts owed to customers
Deposits
Current accounts 3,695 3,165 3,419
Demand deposits 2,453 2,559 2,342
Savings accounts 1,019 1,009 1,017
Foreign currency deposits 678 547 561
Other deposits 1,804 2,186 1,696
Deposits in total 9,649 9,467 9,035
Other liabilities 1,401 961 1,265
Total 11,050 10,427 10,299
Amounts owed to credit 11,916 10,985 10,638
institutions and customers in
total
18 DEBT SECURITIES IN ISSUE
3/2005 12/2004 3/2004
Debt securities
Commercial paper 18 18 300
Certificates of Deposit 2,886 3,121 1,967
Bonds and notes 2,897 2,623 2,107
Other 104 150 182
Total 5,906 5,912 4,556
Subordinated debt securities
Preferred capital notes 223 225 125
Other 497 487 497
Total 720 712 622
Debt securities in issue in total 6,625 6,625 5,178
30 (42)
21 OTHER LIABILITIES
3/2005 12/2004 3/2004
Accruals and deferred income 323 332 244
Other liabilities 629 378 569
Items in transit 405 296 305
Other 224 82 264
Total 953 710 813
Other notes
22 CONTINGENT LIABILITIES AND
COMMITMENTS
3/2005 1-12/2004 3/2004
Off-balance sheet items
Guarantees and assets pledged as 2,534 2,429 1,911
colleteral security
Undrawn loans, overdraft 3,717 3,575 3,430
facilities and commitments to
lend
Other commitments 20 7 15
Total 6,270 6,011 5,356
Asset pledged as security and
secured liabilities
Asset pledged as colleteral
Pledges 1,260 1,264 1,171
Secured liabilities and
commitments
Other liabilities - - 22
Off-balance sheet items 733 716 460
Other commitments
Intra-day overdraft limit of 800 800 800
the Bank of Finland's settlement
account
Other 247 243 674
Assets sold under agreements to 58 8 7
repurchase
Operating lease commitments
< 1 year 20 20 2
1 - 5 years 51 50 26
> 5 years 48 50 94
Total 119 120 122
23 MUTUAL FUND CAPITAL 1-3/ 1-3/ 1-12/
2005 2004 2004
Equity funds 2,844 2,117 2,812
Balanced funds 752 539 651
Money market funds 2,533 2,100 2,078
Bond funds 860 653 760
Absolute return funds 484 477 468
Risk funds 22 14 14
Total 7,495 5,900 6,783
31 (42)
P&C Insurance business
Notes for income Statement
5 PREMIUMS EARNED
1-3/ 1-12/
2005 2004
Premiums written
Direct insurance 1,419 2,427
EEA countries 1,419 2,427
Norway 451 874
Sweden 381 944
Finland 424 374
Denmark 136 167
Baltic and Poland 27 68
Other 0 -
Total direct insurance 1,419 2,427
Reinsurers' share -77 -123
Premiums written after reinsurers' share 1,343 2,304
Change in the gross provision for unearned premiums -457 467
Reinsurers' share 20 -74
Premiums earned 906 2,697
6 NET INCOME FROM INVESTMENTS
1-3/ 1-12/
2005 2004
Derivatives 18 45
At fair value through profit or loss assets
Debt securities 55 173
Equities 20 26
Other -18 -21
Total 58 178
Subordinated debt securities -5 -14
Investment properties 3 -12
Net income from investments in total 74 198
Net income from investments includes interest, dividends, impairment
and realised and unrealised gains and losses on investment
securities, rental income, property expenses, depreciation,
impairment and realised gains and losses on investment properties
32 (42)
7 STAFF COSTS
1-3/ 1-12/
2005 2004
Wages and salaries -74 -229
Pension costs -16 -51
Other social security costs -16 -74
Total -106 -353
The average number of persons employed 6,651 6,776
8 OTHER OPERATING EXPENSES
1-3/ 1-12/
2005 2004
Administrative expenses -34 -87
Amortisation and depreciation of intangible and tangible -7 -40
assets
Other -80 -209
Total -121 -335
Notes for balance sheet
10 TRADING ASSETS AND LIABILITIES AND DERIVATIVE FINANCIAL
INSTRUMENTS
3/2005 12/2004
Fair Fair value Fair Fair value
value value
Contract/ Assets Liabilities Contract/ Assets Liabilities
notional notional
amount amount
Derivatives held for
trading
Interest rate
derivatives
Exchange-traded 0 1 0 1,944 - 16
derivatives
Foreign exchange
derivatives
OTC derivatives 3,557 56 55 10,788 175 112
Equity derivatives
Exchange-traded 0 1 1 132 1 -
derivatives
Total derivative 3,557 58 56 12,864 176 129
assets/(liabilities)
held for trading
33 (42)
13 INVESTMENTS
3/2005 12/2004
Securities at fair value through profit or loss
Debt securities 7,967 7,597
Equity securities 1,042 966
Total 9,009 8,563
Loans and other receivables
Deposits with ceding undertakings 3 2
Investment property
Book value 102 122
Fair value 102 122
Investments in total 9,113 8,687
15 INTANGIBLE ASSETS
3/2005 12/2004
Goodwill 550 549
Other 71 75
Total 621 623
16 OTHER ASSETS
3/2005 12/2004
Prepayments and accrued income 254 97
Other assets 1,165 974
Arising from direct insurance operations 864 655
Arising from reinsurance operations 84 91
Deferred acquisition costs 109 112
Other assets 107 117
Total 1,419 1,072
18 DEBT SECURITIES IN ISSUE
3/2005 12/2004
Subordinated debt securities
Preferred capital notes 295 271
21 OTHER LIABILITIES
3/2005 12/2004
Accruals and deferred income 153 173
Provisions 131 138
Other liabilities 939 452
Arising out of direct insurance operations 132 166
Arising out of reinsurance operations 93 46
Settlement receivables 388 46
Unpaid unemployment fees 165 15
Other liabilities 161 179
Total 1,223 762
34 (42)
Other notes
22 CONTINGENT LIABILITIES AND COMMITMENTS
3/2005 12/2004
Guarangees for own liabilities
Pledges 252 239
Related liability
Derivative transactions 135 127
Letters of credit 92 97
Other contingent liabilities and commitments
Assets covered by policyholders' beneficiary rights 295 296
Remaining commitments to private equity funds 40 45
Other 25 41
Operating lease commitments
< 1 year 27 29
1 - 5 years 73 73
> 5 years 20 7
Total 119 109
Life insurance business
Notes for income Statement
5 PREMIUMS EARNED
1-3/2005 1-3/2004 1-12/2004
Premiums from insurance contracts
Direct insurance
Premiums from contracts with 54 54 250
discretionary participation feature
Premiums from contracts without 0 0 1
discretionary participation feature
Reinsurance 1 2 -9
Total 55 56 242
Premiums from investment contracts
Premiums from contracts with 0 1 1
discretionary participation feature
Premiums from contracts without - - -
discretionary participation feature
Total 0 1 1
Total premiums from insurance and 56 57 243
investment contracts
Reinsurers' shares -1 -2 -17
Total 55 56 225
35 (42)
Premiums from unit-linked contracts
Premiums from unit-linked insurance 75 73 280
contracts
Premiums from unit-linked investment 1 2 5
contracts
Total 76 75 285
Direct insurance- and investment 131 130 537
contracts
Reinsurance 0 1 -26
Premiums total 131 130 510
Direct insurance
Finland 125 124 519
Baltic countries 4 4 12
Poland 1 1 5
Total 131 130 537
Regular premiums, insurance contracts 72 73 308
Regular premiums, investment contracts
Single premiums, insurance contracts 57 3 6
Single premiums, investment contracts 2 54 224
Total 131 130 537
Premiums from insurance contracts
Life insurance
Unit-linked individual life 55 55 194
insurance
Other individual life insurance 17 20 67
Employees' group life insurance 0 0 4
Other group life insurance 2 1 3
Total 74 76 268
Pension insurance
Unit-linked individual pension 18 16 74
insurance
Other individual pension insurance 23 25 92
Unit-linked group pension insuranca 3 1 12
Other group pension insurance 13 7 86
Total 55 51 264
Total 129 126 532
Premiums from investment contracts
Life insurance
Unit-linked capital redemption 1 2 5
policy
Other capital redemtpion policy 0 1 1
Total 2 3 5
Premiums from insurance and investment 131 130 537
contracts in total
36 (42)
6 NET INCOME FROM INVESTMENT ASSETS
1-3/ 1-3/ 1-12/
2005 2004 2004
Derivatives -26 -12 46
Available-for-sale assets 115 75 215
Debt securities 51 29 100
Equities 64 46 115
Debt securities - held-to-maturity 2 1 11
Investments related to unit-linked
contracts at fair
value through profit and loss 25 25 48
Debt securities 0 1 3
Equities 25 24 46
Investment properties 5 4 29
Other 3 -2 -11
Net income from investments in total 124 92 339
Net income from investments includes
interest, dividends, impairment and
realised gains and losses on investment
securities, rental income, property
expenses, depreciation, impairment and
realised gains and losses on investment
properties
7 STAFF COSTS
1-3/ 1-3/ 1-12/
2005 2004 2004
Wages and salaries -5 -4 -17
Pension costs -1 -1 -2
Other social security costs 0 0 -1
Total -6 -5 -20
The average number of persons employed 368 375 372
8 OTHER OPERATING EXPENSES
1-3/ 1-3/ 1-12/
2005 2004 2004
Administrative expenses -3 -3 -12
Amortisation and depreciation of -1 -1 -3
intangible and tangible assets
Other -4 -3 -17
Total -8 -7 -32
37 (42)
Notes for balance sheet
10 TRADING ASSETS AND LIABILITIES AND DERIVATIVE FINANCIAL
INSTRUMENTS
3/2005 12/2004
Fair Fair value Fair Fair value
value value
Cont-ract/ Assets Liabilities Cont-ract/ Assets Liabilities
notio-nal notio-nal
amount amount
Derivatives held for
trading
Interest rate
derivatives
OTC derivatives 170 - 0 89 0 -
Exchange-traded 962 2 6 610 1 2
derivatives
Foreign exchange
derivatives
OTC derivatives 2,207 4 9 979 27 7
Equity derivatives
Exchange-traded 48 2 0 - - -
derivatives
Commodity
derivatives
OTC derivatives 50 - 1 60 1 1
Total derivative 3,438 7 16 1,738 30 9
assets/(liabilities)
held for trading
Derivatives held for
hedging
Derivatives
designated as fair
value hedges
Foreign exchange 123 0 1 252 8 -
derivatives
Total derivative 123 0 1 252 8 -
assets/(liabilities)
held for hedging
Total derivative 3,561 8 18 1,990 38 9
assets/(liabilities)
3/2004
Fair Fair value
value
Cont-ract/ Assets Liabili-ties
notional
amount
Derivatives held for trading
Interest rate derivatives
Exchange-traded derivatives 1,153 6 6
Foreign exchange derivatives
OTC derivatives 1,093 9 16
38 (42)
Commodity derivatives
OTC derivatives 40 3 -
Total derivative 2,286 17 22
assets/(liabilities) held for
trading
Derivatives held for hedging
Derivatives designated as fair
value hedges
Foreign exchange derivatives 357 0 2
Total derivative 357 0 2
assets/(liabilities) held for
hedging
Total derivative 2,643 18 24
assets/(liabilities)
13 INVESTMENTS
3/2005 12/2004 3/2004
Loans and other receivables
Deposits with ceding undertakings 18 16 27
Other 4 4 3
Total 22 20 31
Securities at fair value through
profit and loss
Debt securities 11 11 6
Equity securities 3 3 2
Total 14 14 8
Securities available-for-sale
Debt securities 3,000 2,789 3,074
Equity securities 1,981 2,085 1,999
Total 4,981 4,874 5,073
Securities held-to-maturity
Debt securities 113 112 102
Investment property
Book value 256 260 286
Fair value 287 288 318
Shares in associated undertakings 1 3 3
Investments in total 5,388 5,283 5,503
14 INVESTMENTS RELATED TO
UNIT-LINKED CONTRACTS
3/2005 12/2004 3/2004
Securities at fair value through
profit and loss
Debt securities 977 868 674
Equity securities 2 13 12
Other investments - 1 1
Total 979 882 687
39 (42)
15 INTANGIBLE ASSETS
3/2005 12/2004 3/2004
Goodwill 153 153 153
Other 3 3 4
Total 156 156 157
16 OTHER ASSETS
3/2005 12/2004 3/2004
Prepayments and accrued income 50 48 56
Other assets
Arising from direct insurance 5 6 2
operations
Arising from reinsurance 1 2 2
operations
Other assets 60 28 35
Total 116 84 94
18 DEBT SECURITIES IN ISSUE
3/2005 12/2004 3/2004
Subordinated debt securities
Preferred capital notes 100 100 100
19 LIABILITIES FOR INSURANCE- AND
INVESTMENT CONTRACTS
3/2005 12/2004 3/2004
Liability for insurance contracts
Liability for contracts with 4,369 4,394 4,372
discretionary participation
feature
Liability for contracts without 30 29 30
discretionary participation
feature
Reinsurance 24 22 40
Total 4,422 4,445 4,442
Liability for investment
contracts
Liability for contracts with 158 182 213
discretionary participation
feature
Total liabilities 4,580 4,626 4,656
Reinsurers' share -16 -16 -11
Liabilities for insurance- and 4,564 4,610 4,645
investment contracts net
20 LIABILITIES FOR UNIT-LINKED
INSURANCE- AND INVESTMENT
CONTRACTS
3/2005 12/2004 3/2004
Liability for unit-linked 962 870 675
insurance contracts
Liability for unit-linked 14 13 12
investment contracts
Total 976 884 687
40 (42)
21 OTHER LIABILITIES
3/2005 12/2004 3/2004
Accruals and deferred income 81 24 12
Arising out of direct insurance 0 0 0
operations
Arising out of reinsurance 12 17 9
operations
Other 75 12 53
Total 169 53 75
Other notes
22 CONTINGENT LIABILITIES AND
COMMITMENTS
3/2005 12/2004 3/2004
Guarangees for own liabilities
Pledges 5 7 10
Mortages 1 2 1
Secured liabilities and 1 3 1
commitments
Collateral against own foreign 15 15 18
reinsurance liabilities
Countersecurities 9 9 10
Other contingent liabilities and
commitments
Investment liabilities 175 179 223
VAT deductions 17 17 16
Other business
Notes for income Statement
6 NET INCOME FROM INVESTMENTS
1-3/2005 1-3/2004 1-12/2004
Available-for-sale assets
Debt securities
Interest 1 2 3
Equities 1 139 144
Total 3 140 147
Investment properties 1 1 3
Net income from investments in total 4 141 150
Net income from investments include
interest income and expenses,
dividends, gains and losses on sale
of assets income from and expenses on
investment properties, depreciation
and impairment losses
41 (42)
7 STAFF COSTS
1-3/ 1-3/ 1-12/
2005 2004 2004
Wages and salaries -9 -11 -38
Pension costs -2 -2 -6
Other social security costs -1 -1 -4
Total -12 -14 -48
Average staff number during the 608 664 648
period
Notes for balance sheet
13 INVESTMENTS
3/2005 12/2004 3/2004
Securities, available-for-sale
Debt securities 99 99 300
- - of which treasury bill and other - - -
eligible bills
Equities 55 49 81
Total 154 148 381
Shares in associated undertakings 19 21 808
Shares in Group undertakigs 3,311 3310 2025
Investment properties
Book value 51 54 113
Fair value 49 52 109
Investments in total 3,535 3,533 3,326
18 DEBT SECURITIES IN ISSUE
3/2005 12/2004 3/2004
Debt securities
Commercial paper 247 325 511
Bonds and notes 299 299 -
Total 546 624 511
Subordinated debt securities
Other than preferred capital notes 599 598 -
Debt securities in issue in total 1,145 1,222 511
42 (42)
22 CONTINGENT LIABILITIES AND
COMMITMENTS
3/2005 1-12/2004 3/2004
Asset pledged as security and secured
liabilities
Asset pledged as colleteral
Pledges 4 4 6
Secured liabilities and commitments
Other liabilities 0 0 -
Off-balance sheet items 0 0 1
Operating lease commitments
< 1 year 2 1 2
1 - 5 years 6 6 0
> 5 years - 0 9
Total 8 8 10
Other liabilities 26 26 -
- ---END OF MESSAGE---
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