Debt Investor Presentation OP-Pohjola Group and Issuing entities Pohjola Bank plc and OP Mortgage Bank www.pohjola.com 2 OP-Pohjola Group Issuing entities are Pohjola Bank plc and OP Mortgage Bank y Leading financial services provider in Finland y Pohjola Bank is rated double A by all three Rating Agencies y Strong capital position and deposit funding base y Liquidity buffer to cover 24 months of maturing wholesale funding y Finnish risk exposure y OP-Pohjola Group's stress test results: The group ranks 9th out of the 91 European banks on capital adequacy. Earnings and capital base remain strong even in the adverse scenarios (Tier 1 ratio at lowest 12.3% end 2011). Pohjola/IR 3 Finnish Economy Pohjola/IR 4 GDP volume, demand components Change in GDP volume GDP shares in 2009 in brackets 8 % 160 Index 6 150 United States Exports 4 (37.4%) 140 2 GDP 130 Private consumption 0 120 (54.9%) -2 Euro Area 110 -4 Public consumption Finland 100 (25.1%) Fixed investment -6 (19.5%) 90 -8 00 01 02 03 04 05 06 07 08 09 10f 11f 909192939495969798990001020304050607080910f11f Sources: Statistics Finland, forecasts OP-Pohjola Group, August 2010 Sources: Reuters EcoWin, forecasts OP-Pohjola Group (August 2010) and IMF (July 2010) Pohjola/IR 5 Finland’s export Goods exports by product group Share of total exports and annual change 2009 Other Forest products industry change -19.8% products Machinery, 10.2% change -23.1% equipment 19.3% and transport Chemical equipment industry 21.5% change -32.8% products 17.3% change -25.7% Electric and electronics 20.6% 11.1% Metals and industry metal products products change -39.5% change -41.4% Source: National Board of Customs Total exports 44.9 EUR Billion (change, -31.5%) Pohjola/IR 6 Finland's Main Trading Partners Goods exports by country 2009 GDP growth Germany 15 %, y/y 10% 10 Sweden Russia Other 10% countries 5 38% Russia 0 Sweden 9% Germany -5 US Finland 8% Norway -10 3% Netherlands Poland 6% -15 United 3% France China Kingdom 01 02 03 04 05 06 07 08 09 10f 11f 4% 4% 5% Sources: Reuters EcoWin, IMF (WEO Update, July 2010), OP-Pohjola Group (August 2010), Source: National Board of Customs National Institute of Economic Research (Sweden) June 2010 Pohjola/IR Manufacturing production and Business 7 outlook Manufacturing production and new Business outlook survey orders 40 Characteristic 140 Index 2005=100 value Manufacturing 130 20 120 Manufacturing production** 0 110 Services 100 -20 90 New orders* -40 80 Construction 70 * 3-month average -60 ** Seasonally adjusted 60 -80 2006 2007 2008 2009 2010 01 02 03 04 05 06 07 08 09 10 Source: Statistics Finland Source: Confederation of Finnish Industries EK (5 August 2010) Pohjola/IR 8 Confidence indicators in Finland Characteristic value 60 40 Services 20 0 -20 Manufacturing -40 -60 Construction -80 00 01 02 03 04 05 06 07 08 09 10 Source: Condeferation of Finnish Industries EK Pohjola/IR 9 Unemployment rate* in Finland and Euro Area 18 % 16 14 Finland 12 10 Euro Area 8 6 4 *Seasonally adjusted 2 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10f 11f Forecast Sources: Statistics Finland, Eurostat, forecasts OP-Pohjola Group, August 2010 10 Consumer confidence indicator Characteristic value 30 20 Personal finances 10 0 -10 Finnish economy -20 -30 00 01 02 03 04 05 06 07 08 09 10 Source: Statistics Finland Pohjola/IR Average house prices and Households’ debt 11 ratio Average house prices Households’ debt ratio Index 1996=100 350 %, of disposable income 350 Norway Denmark 300 300 Sweden 250 250 200 200 Norway Sweden Finland 150 150 Denmark 100 Finland 100 50 50 0 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 98 99 00 01 02 03 04 05 06 07 08 09 Sources: Reuters EcoWin, Statistics Sweden Sources: Central Banks, Statistics Finland Pohjola/IR 12 Corporate debt Year 2009 160 % of GDP 140 120 100 80 60 40 20 0 Finland Norway Denmark Sweden Corporate loans* Debt securities** * Excl. loans between Finnish companies ** Commercial papers, corporate bonds and financial derivatives Source: Eurostat, Consolidated Financial Accounts, Norway year 2008 Pohjola/IR 13 Forecast for the Finnish economy Published on 30 August, 2010 2009 2009 2010f 2011f EUR bn Volume, % change on previous year GDP 171,3 -8,0 2,6 2,7 Imports 59,8 -18,1 6,6 7,9 Exports 64,0 -20,3 8,1 7,7 Private consumption 94,0 -1,9 2,2 2,9 Public consumption 43,0 1,2 0,8 0,5 Private fixed investment 28,6 -17,4 0,1 5,0 Public fixed investment 4,8 6,1 -0,1 2,5 Other key indicators 2009 2010f 2011f Consumer price index, % change y/y 0,0 1,1 2,1 Wage and salary earnings, % change y/y 3,9 2,7 2,5 Unemployment rate, % 8,2 8,4 7,8 Current account balance, % of GDP 1,3 1,4 1,1 General government debt, % of GDP 44 49,8 52,4 General government net lending, % of GDP -2,2 -4,3 -2,0 Pohjola/IR 14 5 year sovereign CDS 02/09-08/10 300 250 200 150 5V CDS, bps 5V CDS, 100 50 0 8/10 8/09 2/10 4/10 6/09 2/09 4/09 6/10 10/09 12/09 Netherlands Finland Germany Sweden Spain France United Kingdom Pohjola/IR 15 Fiscal balance and government debt Fiscal balance as % of GDP 0 Finland Luxembourg -3 Austria Germany Belgium Italy -6 Euro Area Netherlands France Portugal Greece -9 Spain -12 Ireland 2010 2011 -15 0 20 40 60 80 100 120 140 Debt as % of GDP Source: European Commission, May 2010 Pohjola/IR 16 OP-Pohjola Group Pohjola/IR 17 Structure of OP-Pohjola and Roles of Group Entities The issuing entities are Pohjola Bank and OP Mortgage Bank OP-Pohjola Group Central Cooperative Over 200 member cooperative banks • Product and Service Development • Retail banking • Support Services Ownership 100% 1.3 million owner-members • Group Steering and Risk Monitoring • Strategic Holdings Pohjola Bank plc Proportion of Proportion of shares 14 % shares 30 % • Banking 4.1 million Proportion Proportion of • Non-life Insurance customers votes 57 % of votes 13 % • Asset Management Ownership Ownership 76% 100% 35,000 holders of OP Series A shares OP Life Mortgage Assurance Bank The Central Cooperative and the member banks are liable for each other's debts and commitments. OP-Pohjola Group is monitored on a consolidated basis by FSA. Pohjola/IR 18 Joint Responsibility y Under the Act on Amalgamations of Deposit Banks (Laki talletuspankkien yhteenliittymästä 599/2010) the member credit Institutions continue to be jointly responsible for each others’ liabilities y If a creditor has not received payment from a member credit institution on a due debt, the creditor may demand payment from the Central Cooperative. y The member credit institutions are the Central Cooperative, Pohjola Bank, Helsinki OP Bank plc, OP-Kotipankki Oyj, OP Mortgage Bank and the Member Cooperative Banks y The insurance companies of the group are not participants in the joint responsibility * Further information on the joint responsibility is available on the EMTN Base Prospectus of Pohjola Bank Pohjola/IR 19 OP-Pohjola The leading financial services provider in Finland Market Share in Loans Market Share in Deposits 31 December 2009 31 December 2009 40 % 40 % 32,7 33,2 35 31,2 35 32,0 30 30 25 25 20 20 15 12,5 15 12,1 10 10 5,3 5,1 3,8 5 3,3 5 3,3 2,8 3,1 2,0 1,4 0,7 1,3 1,1 0 0 OP- Nordea Danske Handels- Savings Aktia Local Ålands- Tapiola OP- Nordea Danske Handels- Savings Aktia Local Ålands- Tapiola Pohjola Bank banken banks cooperative banken Bank Pohjola Bank banken banks cooperative banken Bank Group banks Group banks Source: Federation of Finnish Financial Services Source: Federation of Finnish Financial Services Market share in non-life insurance Market shares in life insurance Gross premiums written 2009 premiums written 2009 35 % Domestic direct insurance 35 % 30 26,9 25,2 30 27,6 23,9 25,0 25 25 18,9 20 20 15 15 10,2 9,1 10,0 10 8,7 10 7,6 6,3 5 5 0 0 OP-Pohjola If Tapiola Fennia Local Others Mandatum OP-Pohjola Nordea Tapiola Skandia Others Group* Insurance** Life* Group Source: Federation of Source: Federation of Finnish Financial Services * Mandatum Life and Kaleva Finnish Financial Services *Pohjola Non-Life, A-Insurance, Eurooppalainen **incl. Palonvara Pohjola/IR 20 OP-Pohjola Group and Pohjola Key figures OP-Pohjola OP-Pohjola Group Pohjola Bank Group Pohjola Bank H1/10 H1/10 2009 2009 Total assets, € million 84 524 38 609 80 430 35 510 Receivables from customers, € million 54 882 11 680 52 992 11 323 Deposits, € million 35 398 4 932 34 617 4 133 Equity capital, € million 6 370 2 239 6 187 2 267 Tier 1, % 12.4 12.0 12.6 11.8 Doubtful receivables, € million 251 39 223 44 Doubtful receivables and zero-interest bearing 0.4 0.28 0.4 0.32 receivables of loans and guarantees, % Loan and guarantee portfolio, € bn 57.6 13.9 55,6 13.3 Impairments of receivables, € million 77 62 179 129 Impairments of receivables / loan 0.13 0.43 0.32 0.94 and guarantee portfolio, % Personnel 12 468 2 999 12 504 2 966 Pohjola/IR 21 OP-Pohjola Group and Pohjola Income Statement, € million OP-Pohjola Group Pohjola Bank OP-Pohjola Group Pohjola Bank H1/10 H1/10 2009 2009 Net interest income 452 127 1 070 241 Net income from Non-Life insurance 190 193 396 402 Net income from Life Insurance 46 -120 Net commissions and fees 283 81 496 143 Other income 96 52 208 108 Total income 990 453 1 872 895 Total expenses 643 253 1 248 501 Earnings before impairments of 343 200 643 394 receivables Impairments of receivables 77 62 179 129 Returns to owner-members 81 160 and OP-bonus customers Earnings before tax 266 139 464 265 Change in fair value reserve 75 -31 677 243 Earnings/loss before tax at fair value 341 108 1 140 508 Pohjola/IR 22 OP-Pohjola Group and Pohjola Key ratios OP-Pohjola OP-Pohjola