OP Financial Group to pay interest on Profit Shares in January 2021

OP Financial Group complies with the recommendation issued by the European Central Bank (ECB) and further postpones payment of interest on Profit Shares for 2019. Interest on Profit Shares will be paid to their beneficiaries in January 2021.

On 2 April 2020, OP Financial Group announced that it would postpone the payment of interest on Profit Shares for the financial year 2019 from June until October 2020 in line with the recommendations issued by the ECB and the FIN-FSA. On 28 July 2020, the ECB extended the validity of its profit distribution recommendation and asked banks to refrain from profit distribution until 1 January 2021. The FIN-FSA also extended the validity of its profit distribution recommendation until 1 January 2021. The purpose of this recommendation is to safeguard the ability of banks to support the real economy by providing funding to businesses and households to alleviate the effects of the economic crisis caused by the COVID-19 pandemic.

OP Financial Group is one of Europe’s strongest banks in terms of capital adequacy, and its June-end CET1 ratio was strong at 17.7%, which exceeds the minimum regulatory requirement by 8 percentage points. The interest payable on Profit Shares for the financial year 2019 totals 97 million euros, which accounted only for 11.6 per cent of OP Financial Group’s 2019 earnings before tax. The postponed interest on Profit Shares accounted only for 0.9 per cent of CET1 capital that totalled 10.8 billion euros at the end of 2019. Payment of interest will have no effect on OP Financial Group’s CET1 ratio.

Profit Shares are long-term equity contributions made by OP cooperative banks’ owner-customers to their local OP cooperative banks. A return target is set annually on Profit Shares. For 2019, this target was 3.25%. Interest on Profit Shares is paid annually out of the distributable surplus under the Co-operatives Act.

Profit Shares increase OP Financial Group’s lending capacity and help it execute its mission: promoting the sustainable prosperity, security and wellbeing of its owner-customers and operating region.

Media enquiries:
OP Corporate Communications, tel. +358 10 252 8719, viestinta@op.fi

OP Financial Group is Finland’s largest financial services group, with two million owner-customers and 12,000 employees. We provide a comprehensive range of banking and insurance services for private and corporate customers. OP Financial Group consists of OP cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. Our mission is to promote the sustainable prosperity, security and wellbeing of our owner-customers and operating region. www.op.fi