OP Financial Group’s Half-year Financial Report 1 January–30 June 2025: Strong result despite uncertain business environment

OP Financial Group
Half-year Financial Report 1 January–30 June 2025
Stock Exchange Release 30 July 2025 at 9.00 EEST

OP Financial Group’s Half-year Financial Report for 1 January–30 June 2025: Strong result despite uncertain business environment

• Operating profit was EUR 990 million (1,229). Operating profit fell by 19% or EUR 239 million year on year.
• Net interest income decreased by 12% to EUR 1,194 million (1,353). Insurance service result increased by 83% to EUR 68 million (37) and net commissions and fees increased by 1% to EUR 404 million (400). Income from customer business, that is, net interest income, insurance service result and net commissions and fees, decreased by a total of 7% to EUR 1,665 million (1,790).
• Impairment loss on receivables reversed came to EUR 19 million. A year ago, impairment loss on receivables totalled EUR 67 million. The ratio of impairment loss on receivables to loan and guarantee portfolio was -0.04% (0.13).
• Investment income decreased by 36% to EUR 206 million (323).
• Total expenses grew by 6% to EUR 1,169 million (1,104). The cost/income ratio weakened to 55% (46).
• The loan portfolio grew year on year by 2% to EUR 99.7 billion (97.7). Deposits increased by 7% to EUR 81.0 billion (75.3).
• The CET1 ratio was 20.8% (21.5), which exceeds the minimum regulatory requirement by 6.1 percentage points. Changes in the collateral management process decreased capital adequacy. The changes in the EU Capital Requirements Regulation (CRR3), which took effect on 1 January 2025, caused a slight reduction in the capital adequacy of OP Financial Group.
• The Retail Banking segment’s operating profit decreased by 31% to EUR 489 million (714). Net interest income decreased by 17% to EUR 909 million (1,093). Impairment loss on receivables totalled EUR 7 million (52). Net commissions and fees increased by 2% to EUR 365 million (359). The cost/income ratio weakened to 62% (49). The loan portfolio grew year on year by 1% to EUR 71.3 billion (70.4). Deposits increased by 4% to EUR 65.5 billion (62.9). Assets under management grew by 7% to EUR 97.7 billion (91.3).
• Corporate Banking segment’s operating profit grew by 25% to EUR 309 million (246). Net interest income grew by 9% to EUR 300 million (274). Impairment loss on receivables reversed came to EUR 26 million. A year ago, impairment loss on receivables totalled EUR 16 million. Net commissions and fees decreased by 9 % to EUR 42 million (46). The cost/income ratio was 34% (35). The loan portfolio grew year on year by 4 % to EUR 28.5 billion (27.4), while deposits increased by 25% to EUR 16.2 billion (13.0).
• The Insurance segment’s operating profit decreased by 31% to EUR 185 million (267). The insurance service result grew to EUR 68 million (37). Investment income fell to EUR 115 million (232). The combined ratio reported by non-life insurance improved to 92.4% (100.4).
• Group Functions’ operating profit was EUR 34 million (-8). Net interest income grew to EUR 5 million (-7).
• OP Financial Group increased the OP bonuses to be earned by owner-customers for 2025 by 40% compared to the normal level of 2022. Additionally, owner-customers get daily banking services without monthly charges in 2025. During the reporting period, the combined value to owner-customers of OP bonuses and daily banking services free of monthly charge totalled EUR 208 million.
• Outlook: OP Financial Group’s operating profit for 2025 is expected to be at a good level but lower than that for 2023 and 2024. For more detailed information on the outlook, see “Outlook”.

OP Financial Group’s key figures and ratios

Comparatives for the income statement items are based on the corresponding figures in 2024. Unless otherwise specified, figures from 31 December 2024 are used as comparatives for balance-sheet and other cross-sectional items. 
* Change in ratio, percentage point(s). 
** As of 1 January 2025, OP Asset Management Ltd, OP Fund Management Company Ltd and OP Real Estate Asset Management Ltd, including subsidiaries, are reported as part of the Retail Banking segment. Comparative information of 2024 has been adjusted accordingly. 
*** The presentation of assets under management was changed at the beginning of 2025. Comparatives have been adjusted to correspond to the current definition.

Comments by the President and Group Chief Executive Officer

The business environment was characterised by geopolitical tensions, trade-policy uncertainty and market turbulence in the first half of 2025

The world economy and financial markets were overshadowed by geopolitical tensions and trade-policy uncertainty in the first six months of 2025. Due to the Ukraine War, the mounting crisis in the Middle East and the new US tariffs, the global economic outlook and projections are unusually uncertain. However, the fundamentals driving growth remain fairly strong, even as they are accompanied by considerable risks and major opportunities. On the other hand, new trade barriers will slow global growth and increase inflationary pressures if implemented.

Despite the uncertainty, growth in the euro zone was relatively healthy in the first half of 2025. Growth was bolstered by lower interest rates combined with persistently strong labour markets. Inflation in the euro zone was at the ECB’s target level of 2%.

Finland’s economy performed relatively well in the first half of 2025; OP Financial Group’s economists continue to forecast growth of 1% for this year. They forecast 1.5% for 2026, but uncertainty about trade policy makes forecasting highly uncertain, particularly looking ahead to next year.

Market interest rates continued to fall in the second quarter of 2025. By the end of June, the 12-year Euribor – the most commonly used reference rate for home loans – was 2.07%, which is 1.5 percentage points lower than a year earlier. The fall in market rates has clearly slowed in recent months. However, due to concerns about the continuing rise in public debt in the euro area, long-term rates have been kept at the levels of early 2025.

Consumer confidence and companies’ willingness to invest are still at a rather low level amid the prevailing uncertainty. Despite this, the housing market seems to be continuing its gradual recovery.

Buffeted by the trade war, stock market prices have been unusually volatile. Stock prices plunged in April after the US announced its plans for new tariffs. By the end of June, prices had recovered almost entirely from their April downturn. For example, on the last day of June, the MSCI World Index was 8.6% higher than at the end of 2024. In Europe stock markets rose by 6.7%, and the Nasdaq Helsinki rose by 11.3%, from the year-end.

OP Financial Group reported a strong performance in an unstable business environment

Despite turbulence and uncertainty in the business environment, OP Financial Group remained highly profitable: its operating profit was EUR 990 million in January–June. This was 19% lower than in the same period in 2024, mainly due to the fall in net interest income. In line with our strategy, our banking and insurance-focused business model has proven to be extremely robust, even in the current unpredictable business environment.

Thanks to our strong financial position, we can continue providing outstanding benefits for our more than 2.1 million owner-customers this year too. We will pay 40% extra (compared to the normal level of 2022) on OP bonuses earned in 2025 and will not charge our owner-customers monthly fees for daily services throughout the year. Together, these benefits will add up to more than EUR 400 million in value for our owner-customers. Being customer-owned, OP Financial Group will continue to share its financial success in various ways, through a range of financial and other benefits for our owner-customers. We will publicly announce our new loyalty programme for owner-customers at the end of this year.

OP Financial Group’s strong capital adequacy and excellent liquidity provide security in an unstable business environment. At the end of June, OP Financial Group’s CET1 ratio was 20.8%, which exceeds the minimum regulatory requirement by 6.1 percentage points. OP Financial Group is one of the most financially solid large banks in Europe.

Furthermore, our liquidity remained excellent. Liquidity was improved by strong growth in deposits, and a total of EUR 3.8 billion in long-term bonds were issued during the reporting period. Strong capital adequacy, excellent liquidity and broad trust among customers and other stakeholders are vital for banks and insurance companies, particularly in these uncertain times. OP Financial Group is in great shape in all these respects.

In January–June, OP Financial Group’s income from customer business decreased by 7% year on year, to EUR 1,665 million. In particular, net interest income fell by 12% due to lower market rates. At EUR 404 million, net commissions and fees grew by 1%.

Compared to H1 2024, the insurance service result grew by 83% to EUR 68 million, mainly due to the favourable claims trend. The combined ratio for non-life insurance improved to 92.4%.

In the first half of 2025, income from investment activities improved moderately well to EUR 206 million, despite the turbulence on the markets. However, this was 36% lower than the result for H1 2024, due to the decrease in equity investment income in particular.

Totalling EUR 1,169 million, OP Financial Group’s expenses for January–June were higher by 6% year on year. This was mainly caused by higher personnel costs and greater investment in ICT development focused on building new banking and insurance core systems, developing our data capabilities, and making extensive use of AI.

OP Financial Group’s staff grew by almost 600 compared to the same period in 2024. Staff numbers grew in areas such as sales and Customer Service, service development, and Risk Management and Compliance. OP Financial Group’s cost-income ratio deteriorated compared to H1 2024, but at 55% it remained at a highly competitive level.

Of the three business segments, the best performer was Corporate Banking, which had an operating profit of EUR 309 million in January–June, a year-on-year increase of 25%. Despite a 31% decrease, Retail Banking’s operating profit of EUR 489 million was also a good performance. The segment’s result was particularly affected by falling market rates, which reduced net interest income by 17%. In the insurance segment, reduced income from investment activities led to a 31% year-on-year fall in profit to EUR 185 million. However, the insurance service result was a clear improvement on the same period in 2024.

OP Financial Group’s customers seem to have fared fairly well – the loan portfolio and deposits grew and doubtful receivables fell

The deposit portfolio grew by 7% in the year since 30 June 2024, and was EUR 81.0 billion at the end of June. Household deposits increased by 5% year on year, to over EUR 50 billion. OP Financial Group’s market share of deposits has been growing markedly over the last couple of years.

Year on year, the loan portfolio grew by 2% to EUR 99.7 billion. New loans drawn down by customers during the reporting period totalled EUR 13.1 billion.

With a market share of over 39%, the Group held onto its position as a strong, leading provider of home loans in Finland. Signs of recovery appeared in the home loan market, supported by lower market interest rates and an increase in disposable household income. In H1 2025, OP Financial Group’s customers drew down almost EUR 3 billion in home loans, an increase of more than 19% year on year. OP’s home loan customers have continued to repay their loans diligently.

Signs of a turnaround in demand for corporate investment financing emerged in the first half of the year. Demand also grew for working capital financing. The corporate loan portfolio grew by 1.3% in January–June 2025 and exceeded EUR 28 billion. Conversely, doubtful receivables were on a downward trend.

Exceptionally, reversal of impairment loss on receivables came to EUR 19 million in January–June, whereas impairment losses of EUR 67 million were recognised for H1 a year earlier. OP Financial Group’s loan portfolio of almost EUR 100 billion is of excellent quality and its credit risks are tightly managed.

Strong growth in savings and investments continued – assets under management increased by 7%

OP Financial Group’s customers were interested in systematically investing in funds: 97,000 new investment agreements were made in H1, which is 16% more than in the same period last year. There are already almost 1.5 million OP mutual fund unitholders. Reaching almost EUR 98 billion in value, investment assets managed by OP Financial Group grew by 7% year on year.

In line with our strategy, we want to coach our customers in making better financial choices. During the spring, we launched the digital OP Investment Academy, for coaching customers on the basics of saving and investing. OP Investment Academy has been extremely well received by our customers, almost 50,000 of whom have used it so far.

Premiums written for non-life insurance increased – claims expenditure decreased year on year

Pohjola Insurance’s premiums written grew by 5% compared to the first half of last year. Premiums written regarding personal customers grew by 7.3%, whereas those related to corporate customers increased by 3.5%.

Pohjola Insurance’s claims expenditure fell by 8% year on year. Compensation was paid for a total of 94% of all claims, which was the same level as a year earlier.

We have a strong focus on preventing online scams – use of OP-mobile continued to grow strongly

Various online scams have proliferated in Finland in recent years and OP Financial Group wants to be proactive in preventing them. We want to provide our customers with a secure digital environment and promote positive development in cybersecurity across Finnish society. A key element of such preventative work consists of enhancing our customers’ ability to recognise scam attempts of different kinds. Accordingly, we launched the “Can you spot scams” test and arranged “The dangers of online scams” events around Finland. We also continuously update our digital services for customers in various ways, in order to provide even greater protection against online fraud of all kinds.

Use of digital services grew substantially again. Our personal and corporate customers increasingly use digital channels for banking and insurance. OP-mobile was logged into more than 63 million times in June. OP-mobile has almost 1.8 million active users, who logged in 36 times – on average – in June to use the banking and insurance services provided by the app.

OP Financial Group is an attractive and sought-after employer

OP Financial Group aims to be the financial sector’s most attractive employer and a sought-after workplace for a range of professionals. In line with our strategy, we have been pursuing this aim systematically and in the long-term: we collaborate proactively with educational institutions, hire summer employees and continuously develop OP’s Kiitorata trainee programme.

OP Financial Group has performed extremely well in Universum’s employee image survey in recent years. The latest survey rates OP Financial Group as Finland’s most attractive employer among business students. We also fared extremely well in the same survey conducted among IT students. Previous surveys have also rated us as Finland’s most attractive workplace among business professionals. OP Financial Group’s excellent employer reputation provides a strong basis for its future success.

My warm thanks to all our customers for the trust they showed in OP Financial Group in January–June 2025. We aim to continue being worthy of the confidence you place in us. I would also like to thank our employees and governing bodies for their excellent work.

Timo Ritakallio
President and Group CEO

January–June 

OP Financial Group’s operating profit was EUR 990 million (1,229), down by 19.5%, or EUR 239 million year on year. Income from customer business (net interest income, net commissions and fees and insurance service result) decreased by a total of 7.0% to EUR 1,665 million (1,790). The cost/income ratio weakened to 54.6% (46.0). New OP bonuses accrued to owner-customers increased by 5.3% to EUR 162 million.

As a result of lower market interest rates, net interest income decreased by 11.8% to EUR 1,194 million. Net interest income reported by the Retail Banking segment decreased by 16.8% to EUR 909 million and that by the Corporate Banking segment increased by 9.5% to EUR 300 million. OP Financial Group’s loan portfolio grew by 2.1% to EUR 99.7 billion while deposits grew by 7.5% to EUR 81.0 billion, year on year. Household deposits increased by 4.9% year on year, to EUR 50.1 billion. New loans drawn down by customers during the reporting period totalled EUR 13.1 billion (10.4).

Impairment loss on receivables reversed came to EUR 19 million in particular due to the repayment of loans. A year ago, impairment loss on receivables totalled EUR 67 million. Final credit losses totalled EUR 36 million (25). At the end of the reporting period, loss allowance was EUR 768 million (824), of which management overlay accounted for EUR 61 million (77). Non-performing exposures decreased, accounting for 2.3% (3.0) of total exposures. Impairment loss on loans and receivables accounted for -0.04% (0.13) of the loan and guarantee portfolio.

Net commissions and fees grew by 1.0% to EUR 404 million. Payment transfer net commissions and fees increased by EUR 5 million to EUR 118 million. Owner-customers’ use of daily banking services has been free of monthly charges since October 2023.

Insurance service result grew by 83.1% to EUR 68 million. Insurance service result includes EUR 269 million (263) in operating expenses. Non-life insurance net insurance revenue, including the reinsurer’s share, grew by 3.0% to EUR 870 million. Net claims incurred after the reinsurer’s share decreased by 8.5% to EUR 546 million. The combined ratio reported by non-life insurance improved to 92.4% (100.4).

Investment income (net investment income, net insurance finance expenses and income from financial assets held for trading) decreased by a total of 36.1% to EUR 206 million. Income from investment activities decreased due to lower income from equity investments than a year ago. Net investment income together with net finance income describe investment profitability in the insurance business. The combined return on investments at fair value of OP Financial Group’s insurance companies was 1.1% (2.6).

Net income from financial assets recognised at fair value through profit or loss, or notes and bonds, shares and derivatives, totalled EUR 100 million (1,034). Net income from investment contract liabilities totalled EUR -51 million (-523). Net insurance finance expenses totalled EUR 35 million (-272).

In banking, net income from financial assets held for trading came to EUR 115 million (70) as a result of changes in the value of derivatives. In the second quarter, OP Financial Group moved structured notes and derivatives economically hedging them under net interest income expenses. The change was also made retrospectively for 2024. Previously these items were presented in full under net trading income in the income statement. Interest expenses transferred a year ago totalled EUR 53 million. For more detailed information on the change, see Note 1 to the Half-year Financial Report 1 January–30 June 2025, Accounting policies and changes in accounting policies and presentation.

Other operating income totalled EUR -1 million (25). A EUR 23 million valuation adjustment in patient insurance policies with full risk for own account decreased other operating income.

Total expenses grew by 5.8% to EUR 1,169 million. Personnel costs rose by 2.9% to EUR 550 million. The increase was affected by headcount growth and pay increases. OP Financial Group’s personnel increased by almost 600 year on year. The number of employees increased in areas such as sales, customer service, service development, risk management and compliance. Cancelling the transfer of the earnings-related supplementary pension liability decreased personnel costs by EUR 20 million. Depreciation/amortisation and impairment loss on PPE and intangible assets decreased by 10.8% to EUR 61 million. Other operating expenses increased by 11.2% to EUR 557 million. ICT costs totalled EUR 284 million (252). Development costs were EUR 204 million (171) and capitalised development expenditure EUR 28 million (31). Charges of financial authorities were EUR 0 million (1). The EU’s Single Resolution Board (SRB) does not collect stability contributions from banks for 2025.

At EUR 154 million (147), OP bonuses for owner-customers are included in earnings and are divided under the following items based on their accrual: EUR 75 million (76) under interest income, EUR 45 million (40) under interest expenses, EUR 26 million (23) under commission income from mutual funds, and EUR 8 million (8) under the insurance service result.

Income tax amounted to EUR 199 million (244). The effective tax rate for the reporting period was 20.1% (19.9). Comprehensive income after tax totalled EUR 855 million (1,031).

OP Financial Group’s equity amounted to EUR 18.6 billion (18.1). Equity included EUR 3.1 billion (3.3) in Profit Shares, terminated Profit Shares accounting for EUR 0.2 billion (0.4).

OP Financial Group’s funding position and liquidity are strong. The Group’s LCR was 213% (193) and NSFR was 132% (129).

Outlook

Trade-policy risks have been reduced by the preliminary tariff agreement between the US and EU, which may increase confidence in the economy. On the other hand, the higher tariffs will impact negatively on the economic outlook. Moreover, equity markets and the business environment of OP Financial Group and its customers could be affected by spreading geopolitical crises or mounting trade barriers. 

OP Financial Group’s operating profit for 2025 is expected to be at a good level but lower than that for 2023 and 2024.

The most significant uncertainties affecting OP Financial Group’s earnings performance are associated with developments in the business environment, changes in the interest rate and investment environment, and developments in impairment loss on receivables. Forward-looking statements in this Half-year Financial Report expressing the management’s expectations, beliefs, estimates, forecasts, projections and assumptions are based on the current view on developments in the economy, and actual results may differ materially from those expressed in the forward-looking statements.

Press conference

OP Financial Group’s financial performance will be presented to the media by President and Group Chief Executive Officer Timo Ritakallio in a press conference on 30 July 2025 at 11am at Gebhardinaukio 1, Vallila, Helsinki.

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

OP Corporate Bank plc and OP Mortgage Bank plc will publish their own Half-year Financial Reports.

Financial reporting

Schedule for financial reporting in 2025:

Helsinki, 30 July 2025

OP Cooperative
Board of Directors

For additional information, please contact:

Timo Ritakallio, President and Group CEO, tel. +358 10 252 4500
Mikko Timonen, Chief Financial Officer, tel. +358 10 252 1325
Piia Kumpulainen, Chief Communications Officer, tel. +358 10 252 7317

DISTRIBUTION

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op.fi

OP Financial Group is Finland’s largest financial services group, with more than two million owner-customers and over 14,000 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. Together with our owner-customers, we have been building Finnish society and a sustainable future for 120 years now. www.op.fi