SAMPO PLC STOCK EXCHANGE RELEASE 1 (44)
9 November 2006, at 8:45
Sampo Group's results for January - September 2006
RETURN TARGETS ACHIEVED IN ALL BUSINESS AREAS
Sampo Group's profit before taxes in January-September 2006 exceeded
one billion euros and amounted to EUR 1,019 million (1,007). Earnings
per share rose to EUR 1.31 (1.29) and were, including the change in
the fair value reserve, EUR 1.21 per share (1.64). All business areas
achieved their RoE targets and annualised RoE (including change in
fair value reserve) for the Group was 20.6 per cent (32.3). Net asset
value per share rose to EUR 8.28 (7.39).
- - Banking and investment services reported an excellent result for
the first nine months of 2006 with profit before taxes rising to EUR
279 million (229). Net interest income amounted to EUR 276 million
(255) and fees and commissions to EUR 189 million (166). The RoE
target of 20 per cent was exceeded and the annualised RoE rose to
25.2 per cent (22.2).
- - The combined ratio for P&C insurance improved to 89.9 per cent for
January-September 2006 (91.6). Profit before taxes amounted to EUR
503 million (626). The annualised RoE exceeded the target of 17.5 per
cent and was 19.2 per cent (25.3).
- - In life insurance profit before taxes for the first nine months of
2006 was EUR 244 million (186). The annualised RoE amounted to 19.5
per cent (52.2), thereby exceeding the target of 17.5 per cent.
KEY FIGURES 1-9 1-9 Change Q3 Q3 Change
EUR m 2006 2005 % 2006 2005 %
Profit before taxes
Banking 279 229 22 101 93 9
P&C insurance 503 626 -20 317 251 26
Life insurance 244 186 31 28 41 -32
Other -11 -34 68 23 -10 -
Group profit before taxes 1,019 1,007 1 461 374 23
Earnings per share, EUR 1.31 1.29 2 0.60 0.48 25
EPS(incl. change in FVR) EUR 1.21 1.64 -26 0.65 0.66 -2
NAV, EUR * ) 8.28 7.39 13 - - -
Average number of staff (FTE) 11 628 11 735 -1 - - -
Group solvency ratio, % 209.7 199.3 5 - - -
RoEC, % 27.7 38.3 28 44.2 47.3 -7
RoE, % 20.6 32.3 -36 32.3 37.0 -13
* ) Less full deferred tax.
The figures in this report are unaudited. Income statement items are
compared on a year-on-year basis whereas comparison figures for
balance sheet items are from 31.12.2005 unless otherwise stated.
Third quarter in brief
Sampo Group's profit before taxes for the third quarter of 2006 was
EUR 461 million (374) and earnings per share amounted to EUR 0.60
(0.48). Taking the change in the fair value reserve into account,
earnings per share were EUR 0.65 (0.66).
In the third quarter of 2006 Sampo plc repurchased its own shares for
EUR 14.3 million. Together with the EUR 29 million increase in the
fair value reserve and the profit for the period this caused net
asset value per share to increase from the end of the second quarter
by EUR 0.64 to EUR 8.28.
Banking and investment services reported a profit before taxes of EUR
101 million (93) in the third quarter. Net interest income grew by
over 10 per cent to EUR 96 million (87), because of growth in the
lending volumes and higher interest rates.
Profit before taxes in P&C insurance was EUR 317 million in the third
quarter (251). Net investment income increased from EUR 151 million
to EUR 189 million. The insurance technical result was excellent and
the combined ratio improved further to 86.3 per cent (89.1).
Life operations made a profit before taxes of EUR 28 million (41).
Premiums written were EUR 119 million, the same as a year before.
The segment Other reported a profit before taxes of EUR 23 million in
the third quarter (-10).
Business areas
Banking and investment services
Sampo Group's banking and investment service companies are organised
under Sampo Bank Group. Sampo Bank plc, the parent company, operates
mainly in Finland and through subsidiaries in all the Baltic
countries. Sampo Bank also has a branch office for corporate clients
in Stockholm and is starting operations in Russia in late 2006. The
investment services companies are Sampo Fund Management Ltd, Mandatum
Asset Management Ltd, Mandatum Securities Ltd, Mandatum & Co Ltd, 3C
Asset Management Ltd and Arvo Asset Management Ltd. Sampo Bank's
branch network also operates as a distribution channel for other
products such as life insurance and offers financial advisory
services.
Results 1-9 1-9 Change Q3 Q3 Change
EUR m 2006 2005 % 2006 2005 %
Net interest income 276 255 8 96 87 10
Net income from
financial transactions 62 50 24 25 20 25
Net fee and commission income 189 166 14 58 59 -2
Impairment losses -1 7 - -6 0 -
Net Income from investments 54 36 50 22 12 83
Other operating income 24 23 4 8 9 -11
Staff costs -149 -143 -4 -47 -41 -15
Other operating expenses -175 -164 -7 -55 -53 -4
Profit (loss) before taxes 279 229 22 101 93 9
Key figures
Cost to income ratio, % 53.7 58.0 -7 51.8 54.2 -4
Return on equity, % 25.2 22.2 15 24.6 28.7 -14
Average number of staff (FTE) 4,380 4,171 5 - - -
Banking and investment services performed very well and profit before
taxes for the first nine months increased 22 per cent to EUR 279
million (229). This increase was mainly derived from higher net
interest and fee and commission income. Annualised return on equity
amounted to 25.2 per cent (22.2), clearly above the target RoE of 20
per cent.
Profit before taxes for the first nine months includes one-off sales
gains worth EUR 40 million. EUR 16 million gain was booked in the
third quarter and EUR 24 million gain in the first quarter of 2006.
Comparison figure includes one-off sales gains worth EUR 32 million.
Net interest income rose to EUR 276 million (255) due to lending
volume growth and higher interest rate level. Already risen interest
rates had positive impact on interest income, especially during the
third quarter. Net income from financial transactions, under which
part of the interest income is booked, also benefited from higher
rates. Housing loan margins have stabilized, however the average
lending margin gradually decreases due to lower margins on new loans.
Net fee and commission income grew to EUR 189 million (166) and was
particularly driven by strong growth in asset management fees.
Total operating costs amounted to EUR 325 million (306). Growth in
costs derives mainly from the Baltic operations. Cost-to-income-ratio
continued to improve and was 53.7 per cent (58.0) during the first
nine months.
Loans and advances to customers increased by 12 per cent from
year-end 2005 and totaled EUR 20,632 million (18,484). Good growth in
mortgages continued and the stock rose year-on-year 22 per cent to
EUR 9,307 million. However, Sampo Bank no longer aims to outpace the
market growth in Finland and during the third quarter mortgage growth
was in-line with the general market growth. Rapid growth continued in
consumer credits. At the end of September loans to private customers
represented 57 per cent and loans to corporate customers 43 per cent
of the total loan portfolio. Corporate lending increased to EUR 8,795
million (8,130).
Geographically the Baltic countries continued to provide the fastest
growth in both lending and deposits. The Baltic loan stock exceeded
two billion euros and amounted to EUR 2,100 million (1,447).
Credit quality remained firm and net impairment on loans and
receivables was EUR -1 million (7). Non-performing loans were 24
basis points of the total loan stock at the end of September.
Deposits amounted to EUR 12,247 million increasing 7 per cent from
year end 2005 (11,442). Deposit margins rose following higher
interest rates.
Rapid growth continued in mutual fund assets, which rose 17 per cent
from year-end 2005 to a new record level of EUR 10,390 million. Net
subscriptions in Sampo's mutual funds this year amount to EUR 1,163
million. Mutual fund assets include EUR 983 million of Sampo Group
investments (1,226), representing 9.5 per cent of total assets
(13.8).
Sampo Bank Group's capital adequacy was 11.1 per cent (10.6). The
tier 1 ratio was 7.3 per cent (7.6) and tier 1 capital rose to EUR
1,288 million (1,255). Risk-weighted assets grew to EUR 17,682
million (16,466).
In July Sampo Bank plc securitized approximately one billion euros of
the corporate loans in its balance sheet. A special company, Sea Fort
Securities plc, was established for the transaction. The transaction
released capital for future growth and adjusted the Bank's credit
risk profile.
In September Sampo Housing Loan Bank plc issued its second EUR 1
billion covered bond on the international capital markets. The bond
was issued under the EUR 5 billion covered bond programme and
followed a transfer of a EUR 850 million housing loan portfolio from
Sampo Bank plc to Sampo Housing Loan Bank plc.
P&C insurance
If P&C insurance group is the leading property and casualty insurance
group in the Nordic region. Its operations also encompass the Baltic
countries. If P&C Insurance Holding Ltd, headquartered in Sweden, 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 1-9 1-9 Change Q3 Q3 Change
EUR m 2006 2005 % 2006 2005 %
Insurance premiums earned 2,813 2,765 2 944 939 1
Net income from investments 226 401 -44 189 151 25
Other operating income 16 14 14 5 4 25
Claims incurred -1,881 -1,856 -1 -611 -611 0
Staff costs -310 -321 3 -107 -110 3
Other expenses -360 -377 5 -104 -122 15
Profit (loss) before taxes 503 626 -20 317 251 26
Key figures
Combined ratio, % 89.9 91.6 -2 86.3 89.1 -3
Risk ratio, % 66.9 67.1 0 64.7 65.1 -1
Cost ratio, % 23.0 24.4 -6 21.6 24.0 -10
Expense ratio, % 16.7 17.9 -7 15.4 17.4 -12
Return on equity, % 19.2 25.3 -24 39.4 30.2 31
Average number of staff (FTE) 6,453 6,616 -3 - - -
Profit before taxes of the P&C insurance operation was EUR 503
million (626). The technical result rose to EUR 414 million (362).
Private business area accounted for 54 per cent, Commercial for 32
per cent, Industrial for 11 per cent and the Baltic countries for 1
per cent of the technical result. EUR 64 million was released from
technical reserves relating to prior year claims (24).
The insurance margin - technical result in relation to net premiums
earned - amounted to 14.7 per cent (13.1). The target RoE of 17.5 per
cent was achieved with an annualised RoE of 19.2 per cent (25.3).
Combined ratio for the first nine months of 2006 was 89.9 per cent
(91.6). Performance improved in all business areas, except in
Baltics, which is still suffering from the large claims in the first
quarter of 2006. In geographic terms the improvement was most
significant in Finland, where the combined ratio decreased by 7.2
percentage points to 93.7 per cent.
The improvements in the combined ratio for the Finnish entities have
been achieved despite an intensified competitive situation in Finland
during 2006. Competition has been particularly evident in motor
insurance for private customers. If has been able to achieve the
improved combined ratio both through risk selection as well as cost
efficiency measures. If is meeting the increased competition in the
market with product and service developments, and by rewarding and
retaining risk aware customers.
If reported a cost ratio of 23.0 per cent for the first nine months
of 2006 (24.4) and a cost ratio of 21.6 per cent for the third
quarter (24.0). Nominal costs decreased 4 per cent to EUR 670 million
(698). Part of the exceptionally strong decrease is explained by a
number of projects, campaigns and manning decisions being delayed
until the fourth quarter of 2006. Cost ratio in the fourth quarter
will therefore be higher than in the third quarter, although cost
efficiency is expected to continue to develop favourably.
Gross written premiums grew by 2 per cent and were EUR 3,228 million
(3,165). Premium growth was strongest in Baltics with 15 per cent,
but business areas Commercial and Industrial also grew by
approximately 4 per cent. Geographically premium growth was strongest
in Norway.
On 30 September 2006 the total investment assets of If amounted to
EUR 10.1 billion, of which 89 per cent was invested in fixed income
instruments (84), 10 per cent in equity (12) and 1 per cent in other
assets (4). Investment climate in the third quarter was significantly
better than in the previous quarter and investment income rose to EUR
189 million after having been EUR 47 million negative in the second
quarter. January-September 2006 investment income amounted to EUR 226
million (401) and the return on investments was 2.8 per cent at
market value (4.9).
Solvency capital amounted to EUR 3,079 million on 30 September 2006
(3,216). The solvency ratio - solvency capital in relation to net
premiums written - was 81 per cent (88). Reserve ratios strengthened
marginally and reserves were 159 per cent (157) of net premiums
written and 258 per cent of claims paid (256).
In October 2006 If entered a partnership with Handelsbanken Liv to
expand its product range in Norway's compulsory company pensions
system (OTP pension system). If will strengthen its focus by offering
additional insurance covering both disability and child pension. As
part of this process, Sampo Life Insurance Company Limited has sold
its Norwegian OTP pension portfolio to Handelsbanken Liv.
Life insurance
Sampo Life Group consists of Sampo Life, a wholly-owned subsidiary of
Sampo plc, operating in Finland and of its subsidiaries in all the
Baltic countries. The company also has a subsidiary in Sweden and a
branch office in Norway to complement the product offering of If P&C.
Results 1-9 1-9 Change Q3 Q3 Change
EUR m 2006 2005 % 2006 2005 %
Premiums 422 433 -3 119 119 0
Net income from investments 407 442 -8 108 157 -31
Other operating income 0 2 - 0 0 -
Claims incurred -397 -448 11 -131 -154 15
Change in liabilities for
inv. and ins. contracts -144 -204 29 -55 -70 21
Staff costs -15 -15 0 -5 -4 -25
Other operating expenses -29 -24 21 -10 -8 -25
Profit (loss) before taxes 244 186 31 28 41 -32
Key figures
Expense ratio, % 102.6 92.9 10 100.2 91.7 +9
Return on equity, % 19.5 52.2 -63 28.8 57.5 -50
Average number of staff (FTE) 361 371 -3 - - -
Sampo Life Group reported a profit before taxes of EUR 244 million
(186) for the first nine months of 2006. Investment income, excluding
income on unit-linked contracts, amounted to EUR 358 million (314).
Sampo Life realised a significant amount of equity gains during the
first half of 2006. The change of the fair value reserve during the
first nine months of 2006 was EUR -52 million (206). RoE target for
life insurance operation, 17.5 per cent, was achieved as the
annualised RoE reached 19.5 per cent (52.2).
Fixed income yields picked up in the third quarter and the overall
return on investments at market value for January-September 2006 rose
to 5.0 per cent (10.0).
Market value of Sampo Life Group's investment assets, excluding the
assets of EUR 1.5 billion (1.3) covering unit-linked liabilities,
were EUR 5.7 billion (5.9) on 30 September 2006. Fixed income covered
67 per cent (64), equity 31 per cent (33) and real estate 2 per cent
(3) of the total assets. Equity investments include direct equity
holdings, equity funds and private equity.
Sampo Life Group solvency capital on 30 September 2006 amounted to
EUR 1,034 million (1,077), which is 4.5 times the minimum
requirement. Solvency ratio remained high at 20.4 per cent (21.3).
Total technical reserves were EUR 6.2 billion (6.0), of which
unit-linked reserves accounted for 24.7 per cent (21.3).
Sampo Life Group's premium income on own account was EUR 422 million
(433). The comparison figure contains two single premium with-profit
contracts transferring the liabilities of two pension funds to Sampo
Life and totalling almost EUR 80 million in premiums. Premiums in the
focus area, unit-linked insurance, grew to EUR 281 million (188).
Premiums from with-profit policies decreased sharply to EUR 141
million from EUR 245 million. Unit-linked premiums represent 66 per
cent (42) of total premiums against the industry average of 53 per
cent. Regular premiums amounted to EUR 231 million (215) and their
share of total premiums increased to 54 per cent (48).
Sampo Life's position in the focus area strengthened further as the
market share in unit-linked premiums in Finland increased to 23.7 per
cent (20.9). Overall Sampo Life has a market share of 19.3 per cent
(20.1) in Finland.
The rapid growth of the Baltic subsidiaries continues and their
premium income rose by 93 per cent to EUR 23 million (12). Sampo
Life's Swedish subsidiary If Liv focuses on risk policies in
cooperation with If P&C. The company's premium income amounted to EUR
2 million.
Other
The operations of Sampo plc (the holding company) and Primasoft are
reported in this segment. Sampo plc's main function is to own and
control the subsidiaries engaged in insurance, banking and investment
services. Primasoft provides IT services for various companies in
Sampo Group.
Results 1-9 1-9 Change Q3 Q3 Change
EUR m 2006 2005 % 2006 2005 %
Net interest income -33 -29 -14 -8 -9 11
Net income from
financial transactions 0 0 - -1 0 -
Fees and commissions, net -1 -1 0 0 0 -
Impairment losses 2 -2 - 0 -2 -
Net income from investments 14 12 17 4 5 -20
Other operating income 79 56 41 49 17 188
Staff costs -29 -31 7 -9 -8 -13
Other operating expenses -44 -41 -7 -13 -12 -8
Profit (loss) before taxes -11 -34 68 23 -10 -
The segment's loss before taxes amounted to EUR 11 million (-34). In
the third quarter of 2006 the segment reported a profit of EUR 23
million (-10), because Sampo plc was awarded EUR 30 million in
compensation for damages for breach of contractual duties.
Sampo plc's balance sheet has strengthened significantly in 2006 and
the liabilities to external creditors are less than EUR 1 billion on
30 September 2006. In addition to short-term operational financing,
liabilities include two debt instruments - a subordinated note and a
senior note with face values of EUR 600 million and EUR 300 million
respectively. Sampo plc's balance sheet total was EUR 4.0 billion
(3.6). Of this amount, holdings in banking and investment services
companies accounted for EUR 0.8 billion (0.9) and holdings in
insurance companies for EUR 2.4 billion (2.4).
Primasoft has a negligible impact on the profit or loss of the Other
segment.
Developments in the third quarter of 2006
Changes in Group structure
Sampo plc's fully-owned subsidiary Sampo Bank plc announced in April
its intention to acquire Industry and Finance Bank (Profibank), a
Russian bank based in St. Petersburg. The necessary official permits,
upon which the transaction was conditional, were obtained and Sampo
Bank closed the transaction in August 2006. The book value of the
acquired assets was EUR 0.4 million and fair value EUR 5.3 million.
The acquired assets mostly consist of a banking license, which was
entered into intangible assets at the value of EUR 4.9 million.
Changes in share capital
Sampo plc's Board of Directors decided on 11 May 2006, on the basis
of the authorisation granted by the Annual General Meeting, to
repurchase a maximum of 15 million Sampo A shares. Shares will be
repurchased by 31 December 2006 at the latest.
Repurchases started on 31 May and 4,328,500 shares have been
repurchased by 9 November. EUR 63.8 million was used to acquire the
shares. 907,500 shares were repurchased during the third quarter of
2006 for EUR 14.3 million.
On 30 September 2006 Sampo plc held 4,328,500 Sampo A shares
corresponding to 0.77 per cent of the total amount of shares and
votes. The repurchased shares correspond to EUR 0.73 million in share
capital on 30 September 2006.
On 10 August 2006 the Board approved subscriptions with the warrants
of the 2000 option programme for a total of 126,800 A shares. The
subscriptions increased the share capital by EUR 21,326.23.
On 30 September 2006 Sampo plc's share capital amounted to EUR
95,065,103.85, and the number of A shares totalled 564,031,440. The
total number of shares of the company, including 1,200,000 B-shares
was 565,231,440.
On 9 October 2006 the subscriptions of 121,450 A shares were approved
with the warrants of the Sampo plc's 2000 option programme. Sampo
plc's share capital after the subscription amounts to EUR
95,085,530.27 and the number of A shares is 564,152,890 shares. After
the increase, the total number of shares of the company, including
1,200,000 B shares, amounts to 565,352,890 shares.
Staff
Sampo Group's full-time equivalent staff on 30 September 2006
amounted to 11,676 employees (11,627). 38 per cent of the staff
worked in banking and investment services, 55 per cent in P&C
insurance, 3 per cent in life insurance, 1 per cent in the holding
company and 3 per cent in Primasoft. 50 per cent worked in Finland,
16 per cent in Sweden, 14 per cent in Norway and 20 per cent in other
countries. The staff continued to decrease in P&C insurance and
Primasoft and increase in the banking operations, mainly because of
rapid growth in the Baltic countries. The average number of employees
during the first three quarters of 2006 was 11,628 (11,735).
Management long-term incentive schemes
The payout on Sampo Group's long-term management incentive schemes is
dependent on Sampo's financial and share price performance. The
incentive schemes 2003I - 2006I extend to 2009. The incentive schemes
increased staff costs in the third quarter of 2006 by EUR 6 million
and on 30 September 2006 the total provision for the schemes was EUR
42 million.
Under the "Sampo 2006" share-based incentive plan a maximum of
1,500,000 Sampo A shares can be distributed in 2008-2010. Sampo's
Board of Directors has allocated 1,300,000 shares of the plan and
confirmed the performance criteria. This incentive plan increased
staff costs by EUR 1 million in the third quarter of 2006.
Ratings
All the main ratings for Sampo Group companies remained unchanged in
the third quarter of 2006.
+-------------------------------------------------------------------+
| Rated company | Moody's | Standard and Poor's |
|-------------------------+-------------------+---------------------|
| | Rating | Outlook | Rating | Outlook |
|-------------------------+--------+----------+-----------+---------|
| Sampo plc | Baa1 | Positive | Not rated | - |
|-------------------------+--------+----------+-----------+---------|
| Sampo Bank plc | A1/P-1 | Stable | A/A-1 | Stable |
|-------------------------+--------+----------+-----------+---------|
| AS Sampo Pank (Estonia) | A2*/P1 | Stable | Not rated | - |
|-------------------------+--------+----------+-----------+---------|
| If P&C Insurance | A2 | Positive | A | Stable |
| (Sweden) | | | | |
|-------------------------+--------+----------+-----------+---------|
| If P&C Insurance Co. | A2 | Positive | A | Stable |
| (Finland) | | | | |
|-------------------------+--------+----------+-----------+---------|
| * Long-term bank | | | | |
| deposit | | | | |
+-------------------------------------------------------------------+
Group solvency
Group solvency is calculated according to the consolidation method
defined in the Chapter 3 of the Act of the Supervision of Financial
and Insurance
Conglomerates, which entered into force on 1 January 2005. In the
consolidation method items, which according to bank or insurance
regulations are part of own funds but not equity, are added to
group's balance sheet equity. Items, which are not available to cover
losses in other group companies, are, however, not included in own
funds.
The Group's solvency ratio (own funds in relation to minimum
requirements for own funds) on 30 September 2006 was 209.7 per cent
(196.1).
SAMPO GROUP SOLVENCY 30.9.2006 31.12.2005 30.9.2005
EUR m
Group capital 4,652.9 4,348.1 4,145.0
Sectoral items 2,938.4 2,733.1 2,200.8
Intangibles and sectoral deductibles -2,277.1 -2,254.5 -1,212.6
Other sectoral non-transferable items -471.6 -493.8 -724.2
Group's own funds, total 4,842.6 4,332.9 4,408.9
Minimum requirements for own funds,
total 2,309.6 2,209.3 2,212.1
Group solvency 2,533.0 2,123.6 2,196.8
Group solvency ratio
(Own funds % of minimum requirements) 209.7% 196.1% 199.3%
In Sampo Group risks are described and aggregated internally through
economic capital, which describes the amount of capital needed to
bear different kinds of risks. The economic capital tied up in the
Group's operations on 30 September 2006 was EUR 3,185 million
(3,148).
Outlook for the rest of 2006
Sampo Group's result for 2006 is expected to be good, mainly as a
result of sound operating profitability in all of its business areas.
Sampo Bank Group continues to benefit from rising interest rates and
is foreseen to report an excellent result for 2006. Favourable trends
in fee income growth and moderate cost growth are expected to
continue. The bank will achieve its RoE target of 20 per cent.
Sampo Group's P&C insurance operation, If, is expected to reach a
combined ratio of 90-91 per cent for the full year 2006. If is
foreseen to reach its RoE target of 17.5 per cent unless investment
market conditions weaken significantly. If reports its investments at
market value through the income statement whereby changes in share
prices or interest rates are directly reflected in its result.
Sampo Life Group's full-year 2006 result is expected to be good and
it is also foreseen to reach the RoE target of 17.5 per cent. Life
insurance operations continue to focus on unit-linked insurance and
risk policies both in Finland and the Baltics.
The parent company, Sampo plc (included in the segment Other), will
in the last quarter of 2006 report a loss of approximately EUR 8
million, consisting mainly of interest payments on debt.
The biggest risk for the outlook is a severe weakening of equity
markets. A sudden rise in interest rates would in the short term
cause losses by lowering the value of bond portfolios, but in the
longer run it would enhance fixed income yields and bank's net
interest income. Sampo Group is strongly capitalised and can
therefore withstand significant investment market volatility.
SAMPO PLC
Board of Directors
For more information, please contact:
Peter Johansson, Group 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
Sampo will arrange an English-language telephone conference for
investors and analysts on the third quarter results at 12.30 p.m.
Please call +44 20 7162 0025 (UK/Europe) or +1 334 323 6201 (North
America). 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 full year 2006 results on 13 February 2007.
DISTRIBUTION:
The Helsinki Stock Exchange
The principal media
www.sampo.com
Financial Supervisory Authority
GROUP FINANCIAL REVIEW
1-9/ 1-9/ 1-12/
FINANCIAL HIGHLIGHTS 2006 2005 2005
GROUP
Revenue EURm 5,182 5,252 6,843
Profit before taxes EURm 1,019 1,007 1,295
% of revenue % 19.7 19.2 18.9
Return on equity (at fair value) % 20.6 32.3 28.4
Return on assets (at fair value) % 3.5 4.6 4.4
Equity/assets ratio % 10.0 9.3 10.1
RoEC % 27.7 38.3 35.0
Group solvency �) EURm 2,533 2,197 2,124
Group solvency ratio % 209.7 199.3 196.1
Average number of staff 11,628 11,735 11,730
BANKING AND INVESTMENT SERVICES
Revenue EURm 1,025 788 1,105
Net interest income EURm 276 255 346
Profit before taxes EURm 279 229 316
% of revenue % 27.2 29.0 28.6
Cost to income ratio % 53.7 58.0 57.3
Return on equity (at fair value) % 25.2 22.2 23.1
Average number of staff 4,380 4,171 4,201
PROPERTY & CASUALTY INSURANCE
Revenue EURm 3,218 3,503 4,398
Premiums written before reinsurers' share EURm 3,228 3,165 3,962
Premiums earned EURm 2,813 2,765 3,709
Profit before taxes EURm 503 626 800
% of revenue % 15.6 17.9 18.2
Return on equity (at current value) % 19.2 25.3 24.1
Risk ratio �) % 66.9 67.1 66.2
Cost ratio �) % 23.0 24.5 24.3
Loss ratio �) % 74.7 75.1 74.1
Loss ratio before unwinding of discount �) % 73.2 73.7 72.7
Expense ratio �) % 16.7 17.9 17.8
Combined ratio % 91.3 93.0 91.9
Combined ratio before unwinding of discount % 89.9 91.6 90.5
Average number of staff 6,453 6,616 6,592
LIFE INSURANCE
Revenue EURm 835 889 1,240
Premiums written before reinsurers' share EURm 428 447 655
Profit before taxes EURm 244 186 234
% of revenue % 29.2 20.9 18.8
Return on equity (at current value) % 19.5 52.2 39.0
Expense ratio % 102.6 92.9 93.4
Average number of staff 361 371 370
OTHER BUSINESS
Profit before taxes EURm -11 -34 -49
Average number of staff 434 577 567
PER SHARE KEY FIGURES
Earnings per share EUR 1.31 1.29 1.68
Earnings per share, incl. change in fair
value reserve EUR 1.21 1.64 1.97
Diluted earnings per share �) EUR 1.28 1.26 1.65
Equity per share EUR 8.26 7.36 7.65
Net asset value per share EUR 8.28 7.39 7.67
Adjusted share price, high EUR 17.99 13.69 14.95
Adjusted share price, low EUR 13.58 9.83 9.83
Market capitalisation EURm 9,221 7,251 8,312
�) 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.
�) Key figures for P&C Insurance are based on activity based costs
and cannot, therefore, be calculated directly from the consolidated
income statement. The result analysis of P&C insurance is presented
in note 20.
In calculating the per share key figures the number of shares used at
the balance sheet date was 560,902,940, the average number of shares
during the period 563,511,668 and the diluted average number of
shares 577,852,010. The numbers have been adjusted for the 4,328,500
own shares held by Sampo Plc.
�) The dilution effect has been calculated as if all the remaining
subscription rights (4,656,325/the option programme of 2000 at the
end of September, 2006) 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. Investment
property has been measured at fair value when calculating return on
assets, return on equity, equity/assets ratio and net asset value per
share. Additionally, the change in fair value reserve has been taken
into account in return on assets and return on equity. A deferred tax
liability has been deducted from valuation
differences.
The key figures for Banking and Investment Services and Other
business have been calculated in accordance with FSA standard 3.1.
The key figures for the insurance business have been calculated in
accordance with the decree of the Ministry of Finance and the
specifying instruction 12/002/2005 of the Insurance Supervisory
Authority.
GROUP QUARTERLY INCOME STATEMENT
7-9/ 4-6/ 1-3/ 10-12/ 7-9/
EURm 2006 2006 2006 2005 2005
Net interest income 93 86 73 86 76
Net income from financial
transactions 16 19 19 17 24
Net fee and commission income 52 63 60 50 57
Impairment losses on loans and
receivables -6 5 2 -4 -1
Insurance premiums 1,064 1,077 1,094 1,161 1,058
Net income from investments 317 13 367 203 320
Other operating income 47 14 13 40 11
Total operating income 1,583 1,278 1,627 1,552 1,546
Claims incurred -742 -746 -791 -710 -765
Change in liabilities for
insurance and investment contracts -55 45 -135 -186 -70
Staff costs -166 -162 -171 -201 -161
Other operating expenses -159 -196 -192 -167 -176
Total operating expenses -1,122 -1,059 -1,288 -1,264 -1,172
Profit before taxes from
continuing operations 461 219 339 287 374
Profit before taxes from
discontinued operations - - - 1 0
Profit before taxes 461 219 339 288 374
Taxes -124 -63 -81 -63 -102
Profit for the period 337 156 258 225 273
Attributable to
Equity holders of parent company 335 154 248 222 270
Minority interests 2 2 9 3 3
CONSOLIDATED INCOME STATEMENT, IFRS
1-9/ 1-9/ 1-12/
EURm Note 2006 2005 Change 2005
Net interest income 1 252 229 23 315
Net income from financial
transactions 2 54 54 0 71
Net fee and commission income 3 175 153 22 203
Impairment losses on loans and
receivables 4 0 6 -5 1
Insurance premiums 5 3,234 3,198 37 4,358
Net income from investments 6 697 881 -184 1,084
Other operating income 75 33 42 72
Total operating income 4,487 4,553 -66 6,104
Claims incurred -2,278 -2,304 26 -3,014
Change in liabilities for insurance
and investment contracts -144 -204 60 -390
Staff costs 7 -500 -504 5 -706
Other operating expenses -547 -533 -15 -700
Total operating expenses -3,469 -3,545 76 -4,809
Profit before taxes from continuing
operations 1,019 1,008 10 1,295
Profit before taxes from
discontinued operations - -1 1 -
Profit before taxes 1,019 1,007 11 1,295
Taxes -268 -269 1 -332
Profit for the period 751 738 12 963
Attributable to
Equity holders of parent company 738 727 949
Minority interests 13 11 14
Earning per share (eur)
Basic 1.31 1.29 1.68
Diluted 1.28 1.26 1.65
CONSOLIDATED BALANCE SHEET, IFRS
EURm Note 9/2006 12/2005 9/2005
Assets
Cash and balances at central banks 1,860 1,665 1,479
Financial assets at fair value through p/l 8, 9 2,574 2,537 2,886
Loans and receivables 10 21,270 18,919 18,898
Investments 11 15,756 15,312 15,519
Investments related to unit-linked
contracts 12 1,548 1,262 1,155
Reinsurers' share of insurance liabilities 568 558 622
Intangible assets 13 836 843 849
Property, plant and equipment 134 135 140
Other assets 2,126 1,580 2,972
Tax assets 161 173 178
Assets classified as held for sale - - 89
Total assets 46,833 42,985 44,788
Liabilities
Financial liabilities at fair value
through p/l 8, 9 577 649 925
Amounts owed to credit institutions and
customers 14 12,657 12,260 11,558
Debt securities in issue 15 11,588 9,647 9,986
Liabilities for insurance and investment
contracts 16 13,051 12,623 12,758
Liabilities for unit-linked insurance and
investment contracts 17 1,542 1,262 1,151
Other liabilities 2,170 1,650 3,649
Tax liabilities 595 545 573
Liabilities directly associated with
assets classified as held for sale - - 18
Total liabilities 42,181 38,637 40,617
Equity 95 96 96
Share capital 1,763 1,814 1,842
Reserves 2,776 2,412 2,208
Retained earnings 4,634 4,322 4,145
Equity attributable to parent company's
equityholders 19 26 26
Minority interests 4,653 4,348 4,171
Total equity
46,833 42,985 44,788
Total equity and liabilities
STATEMENT OF
CHANGES IN EQUITY,
IFRS
Share Fair
Share premium Legal value Retained Minority
EURm capital account reserve reserve earnings Total interests Total
Equity at 1 Jan.
2005 95 1,019 370 233 1,723 3,440 26 3,465
Cash flow hedges:
- recognised in
equity during the
period 8 8 8
- recognised in
p/l -9 -9 -9
Financial assets
available-for-sale
- change in fair
value 348 348 348
- recognised in
p/l -144 -144 -144
Exchange rate
translation
difference -45 -45 -45
Profit for the
period 727 727 11 738
Total income and
expenses
recognised for the
period 202 682 884 11 895
Dividends -113 -113 -11 -124
Subscription for
shares with
options 1 17 18 18
Acquisition of own
shares -88 -88 -88
Recognition of
undrawn dividends 4 4 4
Equity at 30
September 2005 96 1,036 370 435 2,208 4,145 26 4,171
Equity at 1 Jan.
2006 96 1,048 370 396 2,412 4,322 26 4,348
Cash flow hedges:
- recognised in
equity during the
period 0 0 0
- recognised in
p/l -1 -1 -1
Financial assets
available-for-sale
- change in fair
value 92 92 92
- recognised in
p/l -146 -146 -146
Exchange rate
translation
difference 15 15 15
Profit for the
period 738 738 13 751
Total income and
expenses
recognised for the
period -55 754 698 13 711
Dividends -339 -339 -20 -359
Subscription for
shares with
options 0 3 4 4
Acquisition of own
shares -64 -64 -64
Recognition of
undrawn dividends 13 13 13
Cancellation of
own shares -1 1 0 0
Equity at 30
September 2006 95 1,052 370 341 2,776 4,634 19 4,653
CASH FLOW STATEMENT, IFRS
1-9/2006 1-9/2005 1-12/2005
Cash and cash equivalents at the
beginning of the period 1,787 1,254 1,254
Cash flows from/used in operating
activities -1,304 -1,542 -1,147
Cash flows from/used in investing
activities -34 -15 75
Cash flows from/used in financing
activities 1,581 1,943 1,605
Cash and cash equivalents at the end of
the period 2,029 1,639 1,787
The cash flow statement reports cash flows during the period
classified by operating, investing and financing activities. Cash
flows are reported by using the indirect method. Cash flows from
operating activities derive primarily from the principal
revenue-producing activities. Cash flows from investments in
subsidiaries and associated undertakings and those from investments
in intangible assets and property, plant and equipment are presented
in investing activities. Financing activities include cash flows
resulting from changes in equity and borrowings in order to conduct
the business. Cash and cash equivalents consist of cash at bank and
in hand, balances with central banks, loans and advances to credit
institutions repayable on demand and short-term deposits (under 3
months).
NOTES
ACCOUNTING POLICIES
Sampo Group's consolidated financial statements are prepared in
accordance with the International Financial Reporting Standards
(IFRS) adopted by the EU. The interim financial statements are
presented in accordance with IAS 34 Interim Financial
Reporting.
In preparing the interim financial statements, the same accounting
policies and methods of computation are applied as in the financial
statements for 2005. The financial statements for 2005 are available
on Sampo's website at the address
www.sampo.com/ir.
SEGMENT INFORMATION
The Group's primary segmentation is based on business areas whose
risks and performance bases as well as regulatory environment differ
from each other. Business segments are Banking and investment
services, P&C insurance, Life insurance and Other operations. Other
operations comprise the operations of the holding company and the
Primasoft Oy information technology
firm.
Inter-segment pricing is based on market prices. Inter-segment
transactions, assets and liabilities are eliminated in the
consolidated financial statements on a line-by-line
basis.
CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR NINE MONTHS ENDED 30
SEPTEMBER 2006
Banking
and P&C Life
EURm investment insurance insurance Other Elimina-tion Group
Net interest
income 276 -33 9 252
Net income
from
financial
transactions 62 0 -8 54
Net fee and
commission
income 189 -1 -13 175
Impairment
losses on
loans and
receivables -1 2 0 0
Insurance
premiums 2,813 422 3,234
Net income
from
investments 54 226 407 14 -4 697
Other
operating
income 24 16 0 79 -44 75
Total
operating
income 603 3,054 829 62 -61 4,487
Claims
incurred -1,881 -397 -2,278
Change in
liabilities
for
insurance
and
investment
contracts -144 -144
Staff costs -149 -310 -15 -29 4 -500
Other
operating
expenses -175 -360 -29 -44 62 -547
Total
operating
expenses -325 -2,551 -586 -73 65 -3,469
net income
between the
segments 14 9 22 -45
Profit
before taxes 279 503 244 -11 4 1,019
Taxes -268
Profit for
the period 751
Attributable
to
Equity
holders of
parent
company 738
Minority
interests 13
CONSOLIDATED
INCOME
STATEMENT BY
SEGMENT FOR
NINE MONTHS
ENDED 30
SEPTEMBER
2005
Banking
and P&C Life
EURm investment insurance insurance Other Elimina-tion Group
Net interest
income 255 -29 3 229
Net income
from
financial
transactions 50 0 4 54
Net fee and
commission
income 166 -1 -12 153
Impairment
losses on
loans and
receivables 7 -2 6
Insurance
premiums 2,765 433 3,198
Net income
from
investments 36 401 442 12 -10 881
Other
operating
income 23 14 2 56 -63 33
Total
operating
income 536 3,180 877 37 -77 4,553
Claims
incurred -1,856 -448 -2,304
Change in
liabilities
for
insurance
and
investment
contracts -204 -204
Staff costs -143 -321 -15 -31 4 -504
Other
operating
expenses -164 -377 -24 -41 73 -533
Total
operating
expenses -306 -2,554 -690 -72 77 -3,545
net income
between the
segments 7 30 23 -60
Profit
before taxes
from
continuing
operations 229 626 187 -34 - 1,008
Profit
before taxes
from
discontinued
operations 0 -1 -1
Profit
before taxes 229 626 186 -34 - 1,007
Taxes -269
Profit for
the period 738
Attributable
to
Equity
holders of
parent
company 727
Minority
interests 11
CONSOLIDATED
INCOME
STATEMENT BY
SEGMENT FOR
YEAR ENDED
31 DECEMBER
2005
Banking
and P&C Life
EURm investment insurance insurance Other Elimina-tion Group
Net interest
income 346 -39 8 315
Net income
from
financial
transactions 65 0 6 71
Net fee and
commission
income 221 -1 -17 203
Impairment
losses on
loans and
receivables 3 -2 1
Insurance
premiums 3,709 649 4,358
Net income
from
investments 46 460 586 15 -23 1,084
Other
operating
income 60 18 2 76 -84 72
Total
operating
income 740 4,187 1,238 49 -111 6,104
Claims
incurred -2,457 -557 -3,014
Change in
liabilities
for
insurance
and
investment
contracts -390 -390
Staff costs -200 -447 -20 -44 5 -706
Other
operating
expenses -224 -484 -37 -55 100 -700
Total
operating
expenses -425 -3,387 -1,004 -98 105 -4,809
net income
between the
segments 28 35 18 -81
Profit
before taxes
from
continuing
operations 316 800 234 -49 -6 1,295
Profit
before taxes
from
discontinued
operations 0 0 0
Profit
before taxes 316 800 234 -49 -6 1,295
Taxes -332
Profit for
the period 963
Attributable
to
Equity
holders of
parent
company 949
Minority
interests 14
CONSOLIDATED
BALANCE SHEET
BY SEGMENT AT
30 SEPTEMBER
2006
Banking
and P&C Life
EURm investment insurance insurance Other Elimina-tion Group
Assets
Cash and
balances at
central banks 1,552 336 81 -109 1,860
Financial
assets at
fair value
through p/l 2,444 136 18 0 -25 2,574
Loans and
receivables 21,268 431 -428 21,270
Investments 430 10,050 5,598 3,381 -3,703 15,756
Investments
related to
unit-linked
contracts 1,548 1,548
Reinsurers'
share of
insurance
liabilities 562 5 568
Intangible
assets 72 586 158 20 836
Property,
plant and
equipment 83 27 5 19 134
Other assets 536 1,365 162 106 -42 2,126
Tax assets 20 118 3 20 1 161
Total assets 26,405 13,179 7,579 3,976 -4,306 46,833
Liabilities
Financial
liabilities
at fair value
through p/l 470 120 14 9 -36 577
Amounts owed
to credit
institutions
and customers 13,103 92 -537 12,657
Debt
securities in
issue 10,692 442 100 882 -528 11,588
Liabilities for
insurance and investment
contracts 8,356 4,696 13,051
Liabilities
for
unit-linked
insurance and
investment
contracts 1,542 1,542
Other
liabilities 939 1,056 130 86 -41 2,170
Tax
liabilities 33 397 159 5 0 595
Total
liabilities 25,237 10,370 6,641 1,075 -1,142 42,181
Equity
Share capital 95
Reserves 1,763
Retained
earnings 2,776
Equity
attributable
to parent
company's
equityholders 4,634
Minority
interests 19
Total equity 4,653
Total equity
and
liabilities 46,833
CONSOLIDATED
BALANCE SHEET
BY SEGMENT AT
31 DECEMBER
2005
Banking
and P&C Life
EURm investment insurance insurance Other Elimina-tion Group
Assets
Cash and
balances at
central banks 1,290 366 211 -201 1,665
Financial
assets at
fair value
through p/l 2,409 87 46 3 -8 2,537
Loans and
receivables 18,913 62 -55 18,919
Investments 74 9,625 5,707 3,374 -3,468 15,312
Investments
related to
unit-linked
contracts 1,262 1,262
Reinsurers'
share of
insurance
liabilities 553 5 558
Intangible
assets 66 595 157 26 843
Property,
plant and
equipment 82 29 5 19 135
Other assets 342 1,104 92 108 -67 1,580
Tax assets 18 127 7 20 1 173
Total assets 23,194 12,484 7,493 3,611 -3,797 42,985
Liabilities
Financial
liabilities
at fair value
through p/l 464 149 36 649
Amounts owed
to credit
institutions
and customers 12,336 106 -182 12,260
Debt
securities in
issue 8,461 443 100 1,036 -393 9,647
Liabilities for
insurance and investment
contracts 7,885 4,738 12,623
Liabilities
for
unit-linked
insurance and
investment
contracts 1,262 1,262
Other
liabilities 892 654 70 101 -67 1,650
Tax
liabilities 21 339 180 5 545
Total
liabilities 22,175 9,470 6,386 1,248 -642 38,637
Equity
Share capital 96
Reserves 1,814
Retained
earnings 2,412
Equity
attributable
to parent
company's
equityholders 4,322
Minority
interests 26
Total equity 4,348
Total equity
and
liabilities 42,985
CONSOLIDATED
BALANCE SHEET
BY SEGMENT AT
30 SEPTEMBER
2005
Banking
and P&C Life
EURm investment insurance insurance Other Elimina-tion Group
Assets
Cash and
balances at
central banks 810 737 92 -160 1,479
Financial
assets at
fair value
through p/l 2,485 365 51 12 -27 2,886
Loans and
receivables 18,882 46 -30 18,898
Investments 107 9,836 5,721 3,529 -3,674 15,519
Investments
related to
unit-linked
contracts 1,155 1,155
Reinsurers'
share of
insurance
liabilities 605 18 622
Intangible
assets 73 601 156 19 849
Property,
plant and
equipment 84 29 6 21 140
Other assets 369 2,079 488 65 -30 2,972
Tax assets 21 133 3 22 178
Assets
classified as
held for sale 70 18 89
Total assets 22,902 14,385 7,707 3,714 -3,920 44,788
Liabilities
Financial
liabilities
at fair value
through p/l 554 341 30 0 925
Amounts owed
to credit
institutions
and customers 11,639 106 -188 11,558
Debt
securities in
issue 8,711 443 100 1,120 -389 9,986
Liabilities for
insurance and investment
contracts 8,080 4,678 12,758
Liabilities
for
unit-linked
insurance and
investment
contracts 1,151 1,151
Other
liabilities 869 2,304 418 87 -29 3,649
Tax
liabilities 44 319 204 5 573
Liabilities
classified as
held for sale 1 17 18
Total
liabilities 21,819 11,487 6,598 1,319 -606 40,617
Equity
Share capital 96
Reserves 1,842
Retained
earnings 2,208
Equity
attributable
to parent
company's
equityholders 4,145
Minority
interests 26
Total equity 4,171
Total equity
and
liabilities 44,788
OTHER NOTES
1 NET INTEREST INCOME
Banking and investment services
1-9/2006 1-9/2005 1-12/2005
Interest income
Loans and receivables 636 484 665
Other interest income 4 0 4
Total 640 484 669
Interest expenses
Amounts owed to credit institutions and
customers -155 -106 -145
Debt securities in issue -209 -126 -179
Other interest expenses 0 2 0
Total -364 -230 -323
Banking and investment services, total 276 255 346
Other business
Other business, total -33 -29 -39
Elimination items between segments 9 3 8
Group, total 252 229 315
Net interest income from banking and
investment services, total
In net interest income 276 255 346
In net income from financial
transactions 49 42 55
In net income from investments 2 0 -2
Total 328 296 398
Interest income and expenses from P&C insurance and life insurance
business are presented in Net income from investments.
2 NET INCOME FROM FINANCIAL TRANSACTIONS
Banking and investment services
1-9/2006 1-9/2005 1-12/2005
Trading assets/liabilities
Debt securities and interest rate
derivatives 40 16 29
Equity securities and equity derivatives 2 2 2
Other 0 0 1
Financial assets designated as at fair
value through p/l
Debt securities 7 21 19
Foreign exchange dealing 12 11 14
Net income from hedge accounting
Change in fair value of hedging
derivative instruments -28 -24 -20
Change in fair value of hedged items 28 23 19
Total 1 -1 -1
Banking and investment services, total 62 50 65
Other business
Other business, total 0 0 0
Elimination items between segments -8 4 6
Group, total 54 54 71
3 FEE AND COMMISSION INCOME AND EXPENSES
Banking and investment services
1-9/2006 1-9/2005 1-12/2005
Fee and commission income
Lending 31 33 39
Borrowing 15 14 20
Payment transactions 43 41 56
Asset management 97 72 101
Guarantees 12 9 13
Investment banking 22 19 25
Other 28 22 30
Total 248 210 283
Fee and commission expenses -59 -45 -63
Banking and investment services, total 189 166 221
Other business
Other business, total -1 -1 -1
Elimination items between segments -13 -12 -17
Group, total 175 153 203
4 IMPAIRMENT LOSSES ON LOANS AND
RECEIVABLES
Banking and investment services
1-9/2006 1-9/2005 1-12/2005
Loans and receivables
Impairment losses -30 -19 -36
Reversal of impairment losses and
recoveries of loan receivables previously
written off 29 26 39
Total -1 7 3
Banking and investment services, total -1 7 3
Other business
Other business, total 2 -2 -2
Group, total 0 6 1
5 INSURANCE PREMIUMS
P&C insurance
1-9/2006 1-9/2005 1-12/2005
Premiums from insurance contracts
Premiums written, direct insurance 3,157 3,097 3,886
Premiums written, assumed reinsurance 71 68 76
Premiums written, gross 3,228 3,165 3,962
Ceded reinsurance premiums written -218 -208 -244
Premiums written, net 3,009 2,957 3,717
Change in unearned premium provision -235 -232 -23
Reinsurers' share 38 40 15
Insurance premiums earned, net 2,813 2,765 3,709
Life insurance
Premiums from insurance contracts
Premiums from contracts with
discretionary participation feature 138 255 377
Premiums from unit-linked contracts 252 184 284
Premiums from other contracts 3 1 3
Insurance contracts, total 394 440 664
Assumed reinsurance 3 3 -13
Premiums from investment contracts
Premiums from contracts with
discretionary participation feature 3 1 1
Premiums from unit-linked contracts 29 4 4
Investment contracts, total 32 4 4
Reinsurers' share -7 -15 -5
Premiums written, total 422 433 649
Single and regular premiums from direct
insurance
Regular premiums, insurance contracts 231 215 370
Single premiums, insurance contracts 163 224 293
Single premiums, investment contracts 32 4 4
Total 426 444 668
Group, total 3,234 3,198 4,358
6 NET INCOME FROM INVESTMENTS
Banking and investment services
1-9/2006 1-9/2005 1-12/2005
Financial assets
Investment securities held-to-maturity 1 1 1
Financial asset available-for-sale
Debt securities 2 -1 4
Equity securities 40 22 25
Total 41 21 29
Other assets 11 14 15
Banking and investment services, total 54 36 46
P&C insurance
1-9/2006 1-9/2005 1-12/2005
Financial assets
Trading assets and derivative financial
instrument 6 8 -7
Financial assets designated as at fair
value through p/l
Debt securities 157 298 258
Equity securities 124 148 280
Total 281 446 538
Loand and receivables 8 11 16
Financial liabilities
Debt securities in issue
Interest expenses on subordinated debt
securities -20 -17 -23
Other financial expenses -7 -7 -10
Other assets 1 6 7
Effect of discounting annuities -40 -39 -52
Fee and commission expenses -3 -7 -9
P&C insurance, total 226 401 460
Life insurance
1-9/2006 1-9/2005 1-12/2005
Financial assets
Trading assets and derivative financial
instrument 13 -47 -56
Financial assets designated as at fair
value through p/l
Debt securities 3 4 4
Equity securities 0 0 1
Total 3 4 5
Investments related to unit-linked
contracts
Equity securities 49 128 155
Investment securities held-to-maturity
Debt securities 0 3 3
Loans and receivables 2 4 4
Financial asset available-for-sale
Debt securities 67 168 201
Equity securities 261 165 250
Total 328 333 450
Financial liabilities
Debt securities in issue
Interest expenses from subordinated
debt securities -5 -4 -6
Other -2 -3 -3
Other assets 12 23 30
Fee and commission income, net 7 1 3
Life insurance, total 407 442 586
Other business
1-9/2006 1-9/2005 1-12/2005
Financial assets
Financial assets available-for-sale 12 9 11
Other assets 2 3 4
Other business, total 14 12 15
Elimination items between segments -4 -10 -23
Group, total 697 881 1,084
7 STAFF COSTS
Banking and investment services
1-9/2006 1-9/2005 1-12/2005
Staff costs
Wages and salaries -117 -113 -160
Pension costs -19 -16 -23
Other social security costs -14 -13 -18
Banking and investment services, total -149 -143 -200
P&C insurance
1-9/2006 1-9/2005 1-12/2005
Staff costs
Wages and salaries -223 -223 -303
Pension costs -47 -50 -76
Other social security costs -41 -48 -68
P&C insurance, total -310 -321 -447
Life insurance
1-9/2006 1-9/2005 1-12/2005
Staff costs
Wages and salaries -12 -12 -17
Pension costs -2 -2 -2
Other social security costs -1 -1 -1
Life insurance, total -15 -15 -20
Other business
1-9/2006 1-9/2005 1-12/2005
Staff costs
Wages and salaries -24 -25 -36
Pension costs -4 -3 -5
Other social security costs -1 -2 -2
Other business, total -29 -31 -44
Elimination items between segments 4 4 5
Group, total -500 -504 -706
8 FINANCIAL ASSETS
AND LIABILITIES AT
FAIR VALUE THROUGH
P/L 9/2006 9/2006 12/2005 12/2005 9/2005 9/2005
Assets Lia-bilities Assets Lia-bilities Assets Lia-bilities
Banking and
investment
services
Assets/liabilities
held for trading 1,340 - 1,262 - 1,311 -
Derivative
financial
instruments (note
9) 472 470 506 464 528 554
Financial assets
designated as at
fair value through
p/l 632 - 641 - 646 -
Banking and
investment
services, total 2,444 470 2,409 464 2,485 554
P&C insurance
Derivative
financial
instruments (note
9) 136 120 87 149 365 341
Life insurance
Derivative
financial
instruments (note
9) 18 14 46 36 51 30
Other business
Assets/liabilities
held for trading - - 1 - 1 -
Derivative
financial
instruments (note
9) 0 9 2 - 11 0
Other business,
total 0 9 3 - 12 0
Elimination items
between segments -25 -36 -8 - -27 -
Group, total 2,574 577 2,537 649 2,886 925
9 DERIVATIVE
FINANCIAL
INSTRUMENTS
Banking and
investment
services
9/2006 12/2005
Fair
Fair value Fair value value Fair value
Contract/ Contract/
Derivatives held notional notional
for trading amount Assets Liabilities amount Assets Liabilities
Interest rate
derivatives 59,973 132 151 40,131 174 190
Foreign exchange
derivatives 5,601 49 40 8,484 98 115
Equity derivatives 25 5 7 8 3 3
Other derivatives 974 90 89 382 21 20
Total derivative
assets/
liabilities held
for trading 66,573 276 287 49,004 295 327
Derivatives held
for hedging
Derivatives
designated as fair
value hedges 5,343 197 183 3,984 210 136
Derivatives
designated as cash
flow hedges 10 0 - 170 1 -
Total derivative
assets/
liabilities held
for hedging 5,352 197 183 4,154 211 136
Total derivative
assets/
liabilities 71,925 472 470 53,157 506 464
9/2005
Fair value Fair value
Contract/
Derivatives held notional
for trading amount Assets Liabilities
Interest rate
derivatives 57,303 204 231
Foreign exchange
derivatives 7,925 96 119
Equity derivatives 7 2 2
Other derivatives 283 19 19
Total derivative
assets/
liabilities held
for trading 65,518 321 371
Derivatives held
for hedging
Derivatives
designated as fair
value hedges 3,567 204 183
Derivatives
designated as cash
flow hedges 186 2
Total derivative
assets/
liabilities held
for hedging 3,753 207 183
Total derivative
assets/
liabilities 69,271 528 554
P&C insurance
9/2006 12/2005
Fair
Fair value Fair value value Fair value
Contract/ Contract/
notional notional
amount Assets Liabilities amount Assets Liabilities
Derivatives held
for trading
Interest rate
derivatives 1,503 2 2 0 0 5
Foreign exchange
derivatives 3,927 121 116 4,562 80 144
Equity derivatives 9 14 2 4 6 -
Total derivative
assets/
liabilities held
for trading 5,440 136 120 4,566 87 149
9/2005
Fair value Fair value
Contract/
notional
amount Assets Liabilities
Derivatives held
for trading
Interest rate
derivatives 0 5 1
Foreign exchange
derivatives 4,869 349 340
Equity derivatives 3 12 1
Total derivative
assets/
liabilities held
for trading 4,872 365 341
Life insurance
9/2006 12/2005
Fair
Fair value Fair value value Fair value
Contract/ Contract/
notional notional
amount Assets Liabilities amount Assets Liabilities
Derivatives held
for trading
Interest rate
derivatives 3,763 11 9 3,986 36 25
Foreign exchange
derivatives 966 4 4 1,057 7 8
Equity derivatives 24 3 0 20 2 3
Commodity
derivatives 0 0 0 31 1 0
Total derivative
assets/
liabilities 4,753 18 14 5,094 46 36
9/2005
Fair value Fair value
Contract/
notional
amount Assets Liabilities
Derivatives held
for trading
Interest rate
derivatives 3,868 41 22
Foreign exchange
derivatives 833 7 7
Equity derivatives 40 2 0
Commodity
derivatives 35 1 0
Total derivative
assets/
liabilities 4,776 51 30
Other business
9/2006 12/2005
Fair
Fair value Fair value value Fair value
Contract/ Contract/
notional notional
amount Assets Liabilities amount Assets Liabilities
Derivatives held
for hedging
Derivatives
designated as fair
value hedges 628 0 9 633 2 -
Total derivative
assets/
liabilities 628 0 9 633 2 -
9/2005
Fair value Fair value
Contract/
notional
amount Assets Liabilities
Derivatives held
for hedging
Derivatives
designated as fair
value hedges 637 11 0
Total derivative
assets/
liabilities 637 11 0
10 LOANS AND RECEIVABLES
Banking and investment services
9/2006 12/2005 9/2005
Loans and advances to credit
institutions
Deposits 355 119 898
Reverse repos 18 - -
Other loans 264 310 234
Total 636 428 1,132
Loans and advances to customers
By type of loan
Home loans 9,307 8,158 7,600
Consumer loans 1,214 1,103 1,057
Other consumer loans 1,334 1,111 979
Finance lease assets 891 766 744
Money market loans 15 15 15
Other commercial loans 7,889 7,349 7,371
Allowances for impairment -18 -18 -16
Total 20,632 18,484 17,750
Banking and investment services, total 21,268 18,913 18,882
Other business
Other business loans and receivables,
total 431 62 46
Elimination items between segments -428 -55 -30
Group, total 21,270 18,919 18,898
11 INVESTMENTS
9/2006 12/2005 9/2005
Banking and investment services
Investments held-to-maturity
Debt securities 44 46 47
Financial assets available-for-sale
Debt securities 370 - 27
Equity securities 5 14 16
Total 376 14 43
Investment property
Carrying amount - 1 1
Fair value - 1 1
Investments in associates 11 14 16
Banking and investment services, total 430 74 107
P&C insurance
Financial assets designated as at fair
value through p/l
Debt securities 9,027 8,509 8,581
Equity securities 975 1,026 1,163
Total 10,002 9,535 9,744
Loans and receivables
Deposits with ceding undertakings 2 3 3
Investment property
Carrying amount 42 83 86
Fair value 43 83 86
Investments in associates 4 4 4
P&C insurance, total 10,050 9,625 9,836
Life insurance
Financial assets designated as at fair
value through p/l
Debt securities 69 49 48
Equity securities 5 5 5
Total 74 53 52
Investments held-to-maturity
Debt securities 16 16 16
Loans and receivables
Deposits 3 3 3
Deposits with ceding undertakings 2 2 17
Total 6 5 20
Financial assets available-for-sale
Debt securities 3,400 3,230 3,016
Equity securities 1,991 2,270 2,444
Total 5,391 5,501 5,460
Investment property
Carrying amount 112 130 166
Fair value 126 146 183
Investments in associates 1 1 7
Life insurance, total 5,598 5,707 5,721
Other business
Financial assets available-for-sale
Debt securities 131 132 100
Equity securities 75 51 53
Total 206 183 153
Investment property
Carrying amount 19 21 43
Fair value 20 21 43
Investments in associates 0 21 21
Investments in subsidiaries 3,156 3,149 3,312
Other business, total 3,381 3,374 3,529
Elimination items between segments -3,703 -3,468 -3,674
Group, total 15,756 15,312 15,519
12 INVESTMENTS RELATED TO UNIT-LINKED
INSURANCE
Life insurance
9/2006 12/2005 9/2005
Financial assets as at fair value
through p/l
Debt securities 15 12 6
Equity securities 1,533 1,251 1,149
Financial assets as at fair value
through p/l total 1,548 1,262 1,155
Other 0 0 0
Life insurance, total 1,548 1,262 1,155
13 INTANGIBLE ASSETS
Banking and investment services 9/2006 12/2005 9/2005
Goodwill 5 5 5
Licences 5
Other intangible assets 62 61 67
Total 72 66 73
P&C insurance 9/2006 12/2005 9/2005
Goodwill 541 533 537
Customer relations 32 38 40
Other intangible assets 13 23 24
Total 586 595 601
Life insurance 9/2006 12/2005 9/2005
Goodwill 153 153 153
Other intangible assets 5 4 3
Total 158 157 156
Other business 9/2006 12/2005 9/2005
Other intangible assets 20 26 19
Group, total 836 843 849
14 AMOUNTS OWED TO CREDIT INSTITUTIONS
AND CUSTOMERS
Banking and investment services 9/2006 12/2005 9/2005
Amounts owed to credit institutions
Deposits from credit insitutions 423 664 468
Repo-sales 31 - -
Other liabilities owed to credit
institutions 366 202 529
Total 821 867 997
Amounts owed to customers
Deposits
Demand deposits 2,715 2,856 2,619
Savings accounts 1,461 1,075 1,013
Current accounts 4,610 3,716 3,936
Money market deposits 821 1,122 783
Other time deposits 2,639 2,673 2,262
Total deposits 12,247 11,442 10,612
Other liabilities
Other liabilities 35 28 30
Total amounts owed to customers 12,282 11,470 10,642
Banking and investment services, total 13,103 12,336 11,639
Other business
9/2006 12/2005 9/2005
Amounts owed to credit institutions
Other liabilities 6 6 7
Amounts owed to customers
Other liabilities 85 99 100
Other business, total 92 106 106
Elimination items between segments -537 -182 -188
Group, total 12,657 12,260 11,558
15 DEBT SECURITIES IN ISSUE
Banking and investment services
9/2006 12/2005 9/2005
Debt securities in issue
Certificates of deposit 3,202 3,384 3,912
Bonds and notes 6,463 4,238 4,078
Total 9,665 7,621 7,991
Subordinated debt securities
Capital securities 346 352 233
Debentures 598 399 401
Perpetuals 83 89 87
Total 1,027 840 721
Banking and investment services, total 10,692 8,461 8,711
P&C insurance
9/2006 12/2005 9/2005
Subordinated debt securities
Capital securities 442 443 443
P&C insurance, total 442 443 443
Life insurance
9/2006 12/2005 9/2005
Subordinated debt securities
Capital securities 100 100 100
Life insurance, total 100 100 100
Other business
9/2006 12/2005 9/2005
Debt securities in issue
Commercial paper 82 149 215
Bonds and notes 211 290 299
Total 294 438 514
Subordinated debt securities
Debentures 589 597 605
Other business, total 882 1,036 1,120
Elimination items between segments -528 -393 -389
Group, total 11,588 9,647 9,986
16 LIABILITIES FOR INSURANCE AND
INVESTMENT CONTRACTS
P&C insurance
Liabilities from insurance contracts 9/2006 12/2005 9/2005
Insurance contracts
Provision for unearned premiums 1,848 1,628 1,860
Provision for claims outstanding 6,508 6,257 6,219
Total 8,356 7,885 8,080
Reinsurers' share
Provision for unearned premiums 86 49 80
Provision for claims outstanding 476 504 525
Total 562 553 605
Life insurance *)
9/2006 12/2005 9/2005
Insurance contracts
Liabilities for contracts with DPF
Provision for unearned premiums 2,973 3,108 3,022
Provision for claims outstanding 1,555 1,463 1,458
Total 4,529 4,571 4,480
Liabilities for contracts without DPF
Provision for unearned premiums 16 15 16
Provision for claims outstanding 3 3 15
Total 20 18 31
Total 4,548 4,589 4,511
Assumed reinsurance
Provision for unearned premiums 5 3 20
Provision for claims outstanding 3 2 3
Total 7 6 23
Insurance contracts, total
Provision for unearned premiums 2,994 3,127 3,058
Provision for claims outstanding 1,561 1,468 1,475
4,555 4,595 4,533
Investment contracts
Liabilities for contracts with DPF
Provision for unearned premiums 140 144 144
Investment contracts, total 140 144 144
Liabilities for insurance and
investment contracts, total
Provision for unearned premiums 3,135 3,270 3,203
Provision for claims outstanding 1,561 1,468 1,475
Life insurance, total 4,696 4,738 4,678
Reinsurers' share
Provision for unearned premiums 0 0 8
Provision for claims outstanding 5 5 10
Total 5 5 18
Group, total 13,051 12,623 12,758
*) Investment contracts do not include a provision for claims
outstanding.
Liability adequacy test does not give rise to
supplementary claims.
Exemption allowed in IFRS 4 Insurance Contracts has been
applied to investment contracts with DPF or contracts with a
right to trade-off for an investment contract with DPF. These
investment contracts have been valued like insurance
contracts.
17 LIABILITIES FOR UNIT-LINKED
INSURANCE AND INVESTMENT CONTRACTS
Life insurance 9/2006 12/2005 9/2005
Unit-linked insurance contracts 1,497 1,246 1,135
Unit-linked investment contracts 45 16 16
Total 1,542 1,262 1,151
18 CONTINGENT
LIABILITIES AND
COMMITMENTS
Banking and
investment
services 9/2006 12/2005 9/2005
Off-balance
sheet items
Guarantees 2,744 2,811 2,718
Undrawn loans,
overdraft
facilities and
other
commitments to
lend 3,911 4,062 4,594
- - original
maturity less
than one year 594 642 943
- - original
maturity more
than one year 3,316 3,420 3,650
Other
irrevocable
commitments 2 4 10
Total 6,656 6,878 7,322
Assets pledged
as collateral
for liabilities
and contingent
liabilities
9/2006 9/2006 12/2005 12/2005 9/2005 9/2005
Liabilities/ Liabilities/ Liabilities/
Assets pledged Assets commit- Assets commit- Assets commit-
as collateral pledged ments pledged ments pledged ments
Financial
assets at fair
value through
p/l
- - Trading
securities 1,648 1,207 1,593 1,038 1,440 1,012
Loans and
receivables
- - Security
deposits 1,930 2,771 1,180 1,751 1,214 1,777
Total 3,578 3,979 2,773 2,789 2,654 2,790
Non-cancellable
operating
leases 9/2006 12/2005 9/2005
Minimum lease
payments under
non-cancellable
operating
leases
not later than
one year 21 21 20
later than one
year and not
later than five
years 51 53 50
later than five
years 38 43 45
Total 109 118 116
P&C insurance
9/2006 12/2005 9/2005
Off-balance
sheet items
Guarantees 47 62 26
Other
irrevocable
commitments 21 31 31
Total 68 93 57
Other
Assets covered
by
policyholders'
beneficiary
rights 318 303 287
Assets pledged
as collateral
for liabilities
and contingent
liabilities
9/2006 9/2006 12/2005 12/2005 9/2005 9/2005
Liabilities/ Liabilities/ Liabilities/
Assets pledged Assets commit- Assets commit- Assets commit-
as collateral pledged ments pledged ments pledged ments
Cash at
balances at
central banks 32 12 42 0 39 11
Investments
- - Investment
securities 328 111 267 129 215 98
Total 360 123 309 130 254 109
Non-cancellable
operating
leases 9/2006 12/2005 9/2005
Minimum lease
payments under
non-cancellable
operating
leases
not later than
one year 32 26 26
later than one
year and not
later than five
years 90 72 67
later than five
years 76 39 16
Total 198 137 108
Life insurance
9/2006 12/2005 9/2005
Off-balance
sheet items
Fund
commitments 201 184 154
Assets pledged
as collateral
for liabilities
and contingent
liabilities
9/2006 9/2006 12/2005 12/2005 9/2005 9/2005
Liabilities/ Liabilities/ Liabilities/
Assets pledged Assets commit- Assets commit- Assets commit-
as collateral pledged ments pledged ments pledged ments
Investments
- - Investment
securities 1 0 4 0 5 0
Non-cancellable
operating
leases 9/2006 12/2005 9/2005
Minimum lease
payments under
non-cancellable
operating
leases
not later than
one year 2 2 -
later than one
year and not
later than five
years 6 6 -
later than five
years 7 7 -
Total 15 15 -
19 MUTUAL FUND CAPITAL
9/2006 12/2005 9/2005
Equity funds 3,940 3,637 3,281
Balanced funds 1,226 1,020 942
Money market funds 2,943 2,316 2,679
Bond funds 1,584 1,407 1,244
Absolute return funds 574 472 598
Risk funds 123 32 29
Total 10,390 8,885 8,773
20 ANALYSIS OF RESULT FOR P&C INSURANCE
1-9/ 1-9/ 1-12/
2006 2005 2005
Profit and loss account
Premiums earned 2,813 2,765 3,709
Claims incurred -2,060 -2,037 -2,697
Operating expenses -468 -495 -661
Other technical income and expenses
(+collective guarantee item) 0 - -2
Allocated investment return transferred
from the non-technical account 130 130 166
Technical result 414 363 516
Investment result 266 439 510
Allocated investment return transferred
to the technical account -170 -169 -217
Other income and expenses -6 -7 -9
Operating result 503 626 800
21 SAMPO PLC'S INCOME STATEMENT AND
BALANCE SHEET, FAS
INCOME STATEMENT
1-9/ 1-9/ 1-12/
2006 2005 Change 2005
Net interest income -27 -26 -2 -34
Divident income 933 515 418 540
Fee income and expenses, net -1 -1 0 -1
Net income from transaction of securities
and foreign exchange dealing 1 0 1 0
Net investment income 2 1 1 -2
Other operating income 49 6 44 12
Administrative expenses -21 -17 -4 -26
Depreciation and impairment on property,
plant and equipment and intangible assets -6 -5 0 -7
Other operating expenses -9 -15 6 -22
Operating profit 921 459 463 460
Income taxes 1 11 -10 14
Profit for the period 923 470 453 474
BALANCE SHEET 9/2006 12/2005 9/2005
ASSETS
Loans and advances to credit institutions 419 47 11
Loans and advances to customers - - 7
Debt securities 131 132 100
Shares and participations 75 51 53
Shares and participations in associates 1 18 18
Shares and participations in Group
companies 3,157 3,157 3,269
Derivatives 0 2 11
Intangible assets 20 26 11
Property, plant and equipment 19
Properties and shares in property
companies 28 31 72
Other 4 5 5
Other assets 86 74 40
Prepayments and accrued income 15 24 13
Tax assets 20 20 19
TOTAL ASSETS 3,956 3,586 3,637
LIABILITIES
Liabilities
Liabilities to customers 85 99 100
Debt securities in issue 294 438 514
Derivatives 9 - 0
Other liabilities 44 49 39
Accruals and deferred income 36 43 36
Subordinated liabilities 589 597 605
Tax liabilities 5 5 5
Total liabilities 1,062 1,233 1,300
Equity
Share capital 95 96 96
Share premius account 1,052 1,048 1,036
Other undistributable reserves 366 366 366
Fair value reserve -5 -9 -10
Other reserves 273 273 273
Retained earnings 254 194 194
Treasury shares -64 -88 -88
Profit for the year 923 474 470
Total equity 2,894 2,354 2,337
TOTAL LIABILITIES 3,956 3,586 3,637
Off-balance sheet items
Commitments
Other than sale and option to resell
transactions 9 12 13
- ---END OF MESSAGE---
Copyright � Hugin ASA 2006. All rights reserved.
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