How is the financial crisis affecting OP-Pohjola Group?

1. How is the financial crisis affecting OP-Pohjola Group? Finnish Cooperative Movement Conference: The Competitiveness of Cooperatives in Changing Business Environment 24 September 2009 Heikki Vitie

2. Structure of the OP-Pohjola Group Owner-members 221 member cooperative banks OP-POHJOLA GROUP CENTRAL COOPERATIVE Non-Group shareholders POHJOLA BANK PLC OP Fund ManagementCompany Ltd OP Life AssuranceCompany Ltd Banking Services Helsinki OP BankPlc Other subsidiaries Investment Services Non-life Insurance SUBSIDIARIES

4. The OP-Pohjola Group’s core values OP-Pohjola Group is for people. A genuine concern for customers and co-workers is the starting point of our operations. People-first approach We operate locally, regionally and nationally as an exemplary and ethically responsible company. Bolstered by our strong professional skills, we bear responsibility for the high quality and reliability of our services. Responsibility Prospering together with our customers both points the way to the development of our operations and services. Operating as a unified group gives our customers greater security and improves our service capabilities. Prospering together

5. Finnish origin Cooperative basis Close to customers Total financial services offering Best loyal customer benefits OP-Pohjola Group’s competitive advantages

6. Effects of the Financial Crisis on the Banking and Insurance Sector 1st phase: Shock (August 2007–2008) • Materialisation of market risk: stock market crash • Lack of confidence reflected in strong growth in risk premiums (funding price) • Insurance companies record plummeting investment income, decreasing solvency and more expensive reinsurance 2nd phase: Economic recession (2009–10) • Materialisation of interest-rate risk: monetary policy easing, governments are launching large-scale support measures to revive the economy and banks are facing narrowing interest margins • Banks are providing for loan losses • Transient improvement in insurance profitability as a result of a reduction in the incidence of loss 3rd phase: Economic recovery (from 2010) • Materialisation of credit risk: growing unemployment, increasing bankruptcies, and loan losses materialise with a lagging effect • Weaker insurance profitability due to falling premiums written

11. Stability through Operating on a Cooperative Basis • The strong capital base of cooperative banks serves as a strong buffer against the financial crisis. • Long-term view does not require doing business with the minimum possible level of capital, but maintaining higher capital adequacy is acceptable. • Drastic economic downturns affect bank's earnings performance and capital adequacy. • During the crisis, OP-Pohjola Group's capital base has remained strong and earnings power at least satisfactory. • Funding based on deposits to a great extent provides business stability, and customer confidence has also been reflected in growth in deposits. • We have continued customer financing and in this way borne responsibility for developments in our operating environment.