OP Financial Group will apply an RWA floor, based on the standardised approach, in the calculation of its capital adequacy ratio
OP Cooperative
OP Corporate Bank plc
OP Mortgage Bank
Inside information
1 March 2022 at 20.00 EET
OP Financial Group will apply an RWA floor, based on the standardised approach, in the calculation of its capital adequacy ratio
In the calculation of its capital adequacy ratio, OP Financial Group has decided to apply an RWA floor — based on the standardised approach — in the second quarter of 2022. This is due to enhanced regulatory requirements and discussions with the European Central Bank (ECB) on the application of the Internal Ratings Based Approach (IRBA).
OP Financial Group’s capital adequacy will remain strong, despite the application of the floor. After the floor has been applied, it is estimated that the Group’s CET1 ratio will exceed the regulatory minimum level by over 5 percentage points, and the financial conglomerate’s FiCo ratio by approximately 20 percentage points. Application of the floor will decrease OP Financial Group’s CET1 ratio by an estimated 3 percentage points and its FiCo ratio by an estimated 30 percentage points. OP Financial Group’s CET1 ratio stood at 18.2% and its FiCo ratio at 146% at the end of 2021.
After application of the floor, OP Corporate Bank’s CET1 ratio will be an estimated 12 per cent and OP Mortgage Bank’s CET1 ratio around 30 per cent. Application of the floor is a temporary capital measure which will not affect OP Financial Group’s good risk position. The impact of the floor will be eliminated in stages over the coming years, as the ECB approves the Group’s development measures regarding the Internal Ratings Based Approach.
Application of the floor will have no material impact in OP Financial Group’s bond issuance plan for 2022.
OP Cooperative
OP Corporate Bank plc
OP Mortgage Bank
Further information:
OP Financial Group’s Investor Relations, IR@op.fi
Media enquiries:
OP Financial Group’s Corporate Communications, tel. +358 10 252 8719, viestinta@op.fi
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OP Financial Group is Finland’s largest financial services group, with two million owner-customers and 13,000 employees. We provide a comprehensive range of banking and insurance services for personal 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.
OP Corporate Bank and OP Mortgage Bank are responsible for OP’s funding in money and capital markets. As laid down in the applicable law, OP Corporate Bank, OP Mortgage Bank and their parent company OP Cooperative and other OP Financial Group member credit institutions are ultimately jointly and severally liable for each other’s debts and commitments. OP Corporate Bank acts as OP Financial Group’s central bank.
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