This announcement has previously been released under ticker SAMAS
(Sampo Oyj), but should have been released under ticker AS60 (SAMPO
BANK PLC).
SAMPO BANK PLC STOCK EXCHANGE RELEASE
13 February 2007, at 9:30
SAMPO BANK GROUP'S RESULTS ANNOUNCEMENT FOR 2006
* Sampo Bank Group's profit before taxes in 2006 increased to EUR
354 million (252), the comparison figures do not include the
investment services companies
* Net interest income increased 9 per cent
* Total operating expenses increased 17 per cent, which was mainly
caused by strong growth in Baltic operations and changes in Group
structure
* RoE for Sampo Bank Group was 24.5 per cent (18.5)
* Loans and advances to customers rose by 14 per cent to EUR 21,084
million
* Profit before taxes during the second half of 2006 was EUR 178
million (134) compared with EUR 177 million (119) during the
first half
Highlights of profit 2006 2005 Change
Net interest income EURm 374 343 31
Net income from financial EURm 89 63 26
transactions
Net fee and commission income EUR m 260 154 106
Impairment losses on loans and EUR m -2 3 -5
receivables
Total operating expenses EUR m 461 394 -67
Profit before taxes EURm 354 252 102
Key figures
Cost to income ratio % 56.5 61.2
Return on equity (at fair value) % 24.5 18.5
Capital adequacy % 11.9 10.6
Deposits EUR m 12,598 11,442 1,156
Lending EUR m 21,084 18,484 2,600
Average number of staff FTE 4,429 4,201 228
The figures in this report are unaudited.
Sampo Bank Group has prepared the consolidated financial statements
for 2006 in compliance with International Financial Reporting
Standards (IFRS) as adopted by the EU and effective at 31 December
2006.
Results
Sampo Bank Group performed well and profit before taxes for the year
2006 improved to EUR 354 million (252). Profit for the year rose to
EUR 274 million (191). The comparison figures do not include the
investment services companies transferred to Sampo Bank Group at the
end of 2005. Their impact on the profit for the year was EUR 28
million. Return on equity amounted to 24.5 per cent (18.5), clearly
above the target RoE of 20 per cent.
Total operating costs amounted to EUR 461 million (394). Growth in
costs derives largely from the aforementioned transfer of investment
services companies to Sampo Bank Group and strong growth in the
Baltic operations. On top of that costs in the fourth quarter include
EUR 18 million in various bonus and incentive scheme costs, largely
due to the sale of Sampo Bank. Cost-to-income-ratio continued to
improve and was 56.5 per cent (61.2).
Net interest income rose to EUR 374 million (343) mainly driven by
strong growth of lending. Interest margins narrowed in retail
lending. Net fee and commission income grew to EUR 260 million (154)
largely due to the transfer of investment services companies, but
also fees and commission unrelated to investment services grew.
Balance sheet
Loans and advances to customers increased by 14 per cent from
year-end 2005 and totalled EUR 21,084 million (18,484). Growth in
mortgages continued and the stock rose year-on-year 19 per cent to
EUR 9,685 million. At the end of the year loans to private customers
represented 59 per cent and loans to corporate customers 41 per cent
of the total loan portfolio. Corporate lending increased to EUR 8,743
million.
Geographically the Baltic countries continued to provide the fastest
growth in both lending and deposits. The Baltic loan stock rose to
2.4 billion euros (1.4).
Credit quality remained firm and net impairment on loans and
receivables was EUR 2 million (-3).
Deposits amounted to EUR 12,598 million increasing 10 per cent from
year end 2005 (11,442).
Changes in Group structure
Sampo Bank plc bought on 16 August 2006 Industry and Finance Bank
(ZAO Profibank) in St. Petersburg, Russia.
Administration
The following persons have been members of the Board of Sampo Bank
plc during the entire accounting year: Bj�rn Wahlroos (chairman),
Patrick Lapvetel�inen (vice chairman), Ilkka Hallavo, Mika Ihamuotila
and Maarit N�kyv�.
Mika Ihamuotila acted as managing director of Sampo Bank in the
accounting year 2006 and Ilkka Hallavo as his deputy.
After the acquisition of all shares of Sampo Bank plc by Danske Bank
A/S, Peter Straarup (chairman), Sven Erik Lystb�k (vice chairman),
Ilkka Hallavo, Lars Stensgaard M�rch, Thomas Mitchell and Maarit
N�kyv� were elected as Board members in an extraordinary general
meeting on 1 February 2007. The Board nominated Ilkka Hallavo as
managing director for the Bank on 1 February 2007 and Maarit N�kyv�
as his deputy.
Raili Ikonen and Juhani Nyyss�nen as her deputy have been staff
representatives in the Board. Staff representatives are not members
of the Board but have a right to be present and speak at the Board
meetings.
The firm of authorised public accountants, Ernst & Young Oy, has
acted as Auditor for Sampo Bank plc with Tomi Englund, APA, as
responsible auditor.
Staff
Sampo Bank Group's number of full-time equivalent staff increased by
339 employees to 4,602 employees at 31 December 2006. The increase
was caused mainly by growth in the Baltic subsidiaries. Of the staff,
74 per cent worked Finland and 26 per cent abroad. The average number
of employees during 2006 was 4,429, compared with 4,201 during 2005.
Ratings
Positive business performance and Danske Bank's acquisition of Sampo
Bank announced on 9 November 2006 had an impact on rating agencies'
assessment. Moody's raised AS Sampo Pank Financial Strength Rating
(FSR) from D to D+ with stable outlook on 3 April 2006. Moody's
placed Sampo Bank plc's A1 and AS Sampo Pank's A2 ratings under
review for possible upgrade and AS Sampo Pank's FSR on positive
outlook on 9 November 2006. Standard & Poor's placed Sampo Bank plc's
A/A-1 ratings under CreditWatch with positive implications on 9
November 2006. Moody's raised Sampo Bank plc's A1 (long-term currency
debt/deposit rating) to Aa2 with stable outlook on 2 February 2007.
At the same time Moody's raised AS Sampo Pank's rating from A2 to A1
with positive outlook. Standard & Poor's raised Sampo Bank plc's
ratings to AA-/A-1+ with stable outlook on 7 February 2007.
Capital adequacy
Sampo Bank Group's capital adequacy was 11.9 per cent at the end of
2006 and the tier 1 ratio was 8.3 per cent. At the end of 2005
capital adequacy was 10.6 per cent and the tier 1 ratio was 7.6 per
cent. Total own funds amounted to EUR 2,123.9 million (1,742.5).
Risk-weighted assets on 31 December 2006 were EUR 17,847.3 million
(16,466.2).
In addition to the profit for the year, the most significant change
in own funds from the end of 2005 was a tier 2 debenture loan issued
in May 2006 of EUR 200 million. Equity rose to EUR 1,196.9 million
(1,017.7), which includes also cash flow hedging derivatives not
included in the own funds of capital adequacy calculation. As
stipulated by the agreement with Danske Bank A/S, in addition to the
EUR 50 million dividend paid earlier in 2006, Sampo Bank plc paid an
additional dividend of EUR 25 million to Sampo plc in connection with
the transaction. Risk-weighted assets grew mainly because of the
growth in lending.
Risk management
The main objective of risk management is to ensure that the capital
base is adequate in relation to the risks arising from business
activities. In addition to statutory capital adequacy calculation,
risks in Sampo Bank Group are described and aggregated internally
through economic capital, which describes the amount of capital
needed to bear different kinds of risks. The requirement is well
covered by equity and capital securities. The major risks associated
with Sampo Bank Group's activities are credit risk, the interest rate
and liquidity risks of banking book, operational risks and various
business risks such as changes in competition or customer behaviour.
The perceived risks in the businesses and operating environment did
not change significantly during 2006. Risk management is described in
detail in the financial statements according to IFRS.
Outlook for 2007
Operating profitability of Sampo Bank Group is expected to remain
good in 2007.
The integration of Sampo Bank's activities into Danske Bank Group is
expected to cost approximately EUR 200 million, of which around EUR
70 million is estimated to occur in 2007.
Board of Directors' dividend proposal
Parent company's distributable capital and reserves totalled EUR
660.3 million, of which the profit for the year is EUR 274.2 million.
Sampo Bank's Board of Directors proposes to the Annual General
Meeting the distributable capital and reserves are used as follows:
No dividend will be issued for the financial year 2006. Retained
earnings are left in the equity capital.
Helsinki, 13 February 2007
Sampo Bank plc
Board of Directors
Sampo Bank plc's Financial Statements and Board of Directors' report
for year 2006 will be published on Sampo Bank plc's Internet pages at
http://www.sampopankki.fi at week 13.
Further information:
Head of Communication Hannu Vuola, +358 (0)10 516 0040
Tables
SAMPO BANK PLC
RELEASE OF FINANCIAL STATEMENTS 31.12.2006
SAMPO BANK GROUP'S FINANCIAL HIGHLIGHTS
2006 2005
Total operating income EURm 817 643
Total operating expenses EURm 461 394
Impairment losses on loans and
receivables 1) EURm 2 -3
Profit before taxes EURm 354 252
Cost to income ratio % 56,5 61,2
Total amount of balance sheet at the end
of the period EURm 26 627 23 207
Equity at the end of the period EURm 1 197 1 018
Return on equity 2) % 24,5 18,5
Group capital adequacy ratios % 11,9 10,6
Average number of staff 4429 4201
Return on assets 2) % 1,1 0,9
Equity/assets ratio % 4,5 4,4
1) Impairment on loans and receivables includes impairment losses,
reversals of them, write-offs and recoveries.
(-) net loss, positive.
2) The change in fair value reserve has been taken into account in
return on assets and return on equity.
Without the change in the fair value reserve the return on equity
would have been 24,8 % for 2006
and 18,9 % for 2005. Capital securities have not been
included in equity.
CONSOLIDATED INCOME STATEMENT BY HALF
YEAR
EURm 7-12/2006 1-6/2006 7-12/2005 1-6/2005
Net interest income 193,7 180,2 178,0 165,0
Net income from financial
transactions 51,5 37,4 31,9 31,4
Net fee and commission income 128,3 131,5 78,5 75,3
Impairment losses on loans and
receivables -6,2 4,7 -4,1 7,0
Net income from investments 25,8 31,6 26,7 20,6
Other operating income 21,0 15,8 21,1 14,6
Total operating income 414,1 401,2 332,1 314,0
Staff costs -116,7 -102,2 -88,2 -92,6
Other operating expenses -119,7 -122,5 -110,0 -102,9
Total operating expenses -236,4 -224,7 -198,2 -195,5
Profit before taxes 177,7 176,5 133,9 118,5
Taxes -38,6 -41,5 -32,1 -29,0
Profit for the financial year 139,2 135,0 101,8 89,6
Attributable to
Equity holders of parent
company 137,0 124,9 99,4 84,7
Minority interest 2,4 9,9 2,4 4,8
CONSOLIDATED INCOME STATEMENT
EURm Note 1-12/2006 1-12/2005 Change
Net interest income 1 373,9 343,0 30,9
Net income from financial
transactions 2 88,9 63,3 25,6
Net fee and commission income 3 259,8 153,9 105,9
Impairment losses on loans and
receivables 4 -1,5 2,9 -4,4
Net income from investments 5 57,4 47,3 10,1
Other operating income 36,8 35,7 1,1
Total operating income 815,3 646,1 169,2
Staff costs 6 -218,9 -180,8 -38,1
Other operating expenses -242,2 -212,9 -29,3
Total operating expenses -461,1 -393,7 -67,4
Profit before taxes 354,2 252,4 101,8
Taxes -80,1 -61,1 -19,0
Profit for the financial year 274,2 191,3 82,9
Attributable to
Equity holders of parent company 261,9 184,1
Minority interest 12,3 7,2
CALCULATION OF FINANCIAL HIGHLIGHTS
Cost to income ratio, %
Staff costs + other operating
expenses
................................. x 100
Net interest income + net income from financial transactions + net
fee and commission income
+ net income from investments + other
operating income
Return on equity, %
Profit before taxes +/- change in fair
value reserve - taxes
................................ x 100
Total equity (average of values on 1
Jan. and 31 Dec.)
Return on assets, %
Profit before taxes +/- change in fair
value reserve - taxes
................................ x 100
Balance sheet, total (average of values on 1 Jan.
and 31 Dec.)
Equity/assets ratio, %
Total equity
................................ x 100
Balance sheet, total
CONSOLIDATED BALANCE SHEET
EURm Note 12/2006 12/2005
Assets
Cash and balances at central banks 1 722,2 1 289,7
Financial assets at fair value
through p/l 7, 8 2 379,6 2 409,4
Loans and receivables 9 21 559,5 18 912,5
Investments 10 353,4 77,2
Intangible assets 11 64,7 67,2
Property, plant and equipment 89,9 81,6
Other assets 453,6 336,1
Tax assets 4,1 0,0
Total assets 26 626,9 23 173,7
Liabilities
Financial liabilities at fair
value through p/l 8 507,4 463,7
Amounts owed to credit
institutions and customers 12 13 255,6 12 336,3
Debt securities in issue 13 10 649,1 8 461,3
Other liabilities 1 013,8 892,0
Tax liabilities 4,0 2,6
Total liabilities 25 429,9 22 156,0
Equity
Share capital 106,0 106,0
Reserves 268,6 272,9
Retained earnings 808,6 622,0
Equity attributable to parent
company's equityholders 1 183,2 1 001,0
Minority interests 13,7 16,7
Total equity 1 196,9 1 017,7
Total equity and liabilities 26 626,9 23 173,7
- ---END OF MESSAGE---
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