A 3.25% return target for OP-Pohjola cooperative banks' Income Shares

12 mars 2014 At the end of March, the first OP-Pohjola Group cooperative banks will launch Income Shares which provide customer-owners with a way of investing in their own OP-Pohjola cooperative banks. A cooperative bank will annually pay interest on Income Shares on the basis of its financial performance. The return target for 2014 is 3.25%. It will be confirmed annually. - An Income Share forms a new investment instrument available only to OP-Pohjola Group cooperative banks' customer-owners. It has features of both an equity and fixed-income investment. With a sum as small as 100 euros, customer-owners can become investors. Income Shares have been designed as long-term investments on which the bank will annually pay interest, explains Timo Liukkonen, Executive Vice President of Banking, OP-Pohjola Group. - The first Group cooperative banks will begin to sell Income Shares at the end of March: Turun Seudun Osuuspankki on 19 March and Keski-Uudenmaan Osuuspankki on 20 March. Other Group cooperative banks will gradually follow suit during the spring according to their own schedules. Helsinki OP Bank Plc is a limited company which intends to issue a debenture loan during the spring. Before selling Income Shares, each Group cooperative bank must approve alterations of the Cooperative Bylaws required for their sale. The governing bodies of the cooperative banks will meet on slightly different dates to decide on this matter. Opportunity to invest in one's own Group cooperative bank An Income Share is an equity investment. Each cooperative bank's Annual Cooperative Meeting or Representative Assembly will annually confirm afterwards interest on the Income Share. Interest will be paid, provided that the cooperative bank concerned has distributable reserves. - As banks with a very good financial standing, cooperative banks are good at meeting this criteria. At OP-Pohjola Group, the aim is that interest payable on Income Shares would be as consistent as possible across Group cooperative banks. The 3.25% return target is quite a competitive interest rate compared with other instruments in the market, points out Liukkonen. - Banks will be subject to ever-tightening regulation as a result of, for example, the new CRD IV and CRR within the EU. Given that the minimum requirements for capital adequacy actually double, stronger capital buffers are required. In February, OP-Pohjola Group increased its target for the CET1 ratio to 18%: Income Shares will play an important role in achieving this target, in addition to measures aimed at improving profitability. - OP-Pohjola Group has a strong and solid capital base, points out Liukkonen. - We aim to further improve it in the long term. A strong capital base is a bedrock on which a lot of things are built; for example the ability to provide customers with financing and a good credit rating. - As a financial services group owned by our customers, we can offer them a long-term investment with a reasonable risk, which supplements benefits from using us as their main bank and insurer, concludes Liukkonen. For more information, please contact: Timo Liukkonen, Executive Vice President, Banking, OP-Pohjola, tel. +358 (0)10 252 4061 This announcement is distributed by GlobeNewswire on behalf of GlobeNewswire clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Pohjola Pankki Oyj via GlobeNewswire [HUG#1768163]